Question

ACC 104 SPI9 Intersession Exam Chipter o s. (15 Points) Following are seven items a through g that would cause Rembrandt Company's book balance of cash to differ from its bank statement balance of cash. a. A service charge imposed by the bank. b. A check listed as outstanding on the previous period's reconciliation and still outstanding at the end of this month. c. A customer's check returned by the bank is marked "Not Sufficient Funds(NSF)" d. A deposit mailed to the bank on the last day of the current month and not recorded on this month's bank statement. e. A check paid by the bank at its correct $190 amount recorded in error in the company's check register at $109. f. An unrecorded credit memorandum indicating that bank collected a note receivable for Rembrandt Company and deposited the proceeds in the company's account. g. A check written in the current period that is not yet paid or returned by the bank. Indicate where each item, letters a-g, would appear on Rembrandt Company's bank reconciliation by placing its identifying letter in the parentheses in the proper section of the form below. Bank statement cash balance Add: Book balance of cash Add Deduct: Deduct: Reconciled balanc.

Answer 1

Answer:

Bank statement cash balance Book Balance of cash

Add: (d) Add: (f)

Deduct: (b) Deduct: (a)

   (g)    (c)

   (e)

Reconciled balance.............. Reconciled balance............

Explanation:

(a) Service charge is to be deducted from book balance

(b) Outstanding check is to be deducted from balance as per bank

(c) NSF check is to be deducted from book balance

(d) Deposit in transit is to be added to balance as per bank

(e) An error (differential amount) by company (recorded lesser amount) has to be deducted from book balance

(f) Note receivable collected by bank has to be added to book balance

(g) Outstanding check has to be deducted from balance as per bank