While performing the monthly bank reconciliation, the bookkeeper for Marcus Company made the journal entry for a bank service charge of $49. Which of the following correctly shows the effect of the entry on the financial statements?
A)Option A
B)Option B
C)Option C
D)Option D

Question

While performing the monthly bank reconciliation, the bookkeeper for Marcus Company made the journal entry for a bank service charge of $49. Which of the following correctly shows the effect of the entry on the financial statements? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The entry to record the service charge will increase expenses, which decreases net income and equity, and decreases cash. It is reported as a cash outflow for operating activities on the statement of cash flows.

While Performing the Monthly Bank Reconciliation, the Bookkeeper for Marcus