If a check correctly written and paid by the bank for $794 is incorrectly recorded in the company's books for $749, how should this error be treated on the bank reconciliation?
A) Subtract $45 from the bank's balance.
B) Add $45 to the bank's balance.
C) Subtract $45 from the book balance.
D) Add $45 to the book balance.
E) Subtract $45 from the bank's balance and add $45 to the book's balance.

Question

Quizplus · Accepted Answer

The company's books show a lower amount than what was actually paid by the bank, so the book balance needs to be adjusted upward. Therefore, $45 should be subtracted from the book balance to reflect the correct amount of $794.

If a Check Correctly Written and Paid by the Bank