a companys own cash records show a balance of $3,200. after examining the bank statement, the following…

a companys own cash records show a balance of $3,200. after examining the bank statement, the following information is revealed. bank’s balance for cash $ 4,000 deposits outstanding $ 2,300 nsf check $ 600 checks outstanding $ 1,800 note collected by the bank $ 2,000 service fee charged by the bank $ 100 the entry to update the companys cash balance after the bank reconciliation is prepared would include a: multiple choice debit to accounts receivable. credit to service revenue. credit to service fee expense. debit to notes receivable.

a companys own cash records show a balance of $3,200. after examining the bank statement, the following information is revealed. bank’s balance for cash $ 4,000 deposits outstanding $ 2,300 nsf check $ 600 checks outstanding $ 1,800 note collected by the bank $ 2,000 service fee charged by the bank $ 100 the entry to update the companys cash balance after the bank reconciliation is prepared would include a: multiple choice debit to accounts receivable. credit to service revenue. credit to service fee expense. debit to notes receivable.

Answer

Explanation:

Step1: Analyze the effects on cash balance

The NSF check and bank - service fee reduce the company's cash balance, while the note collected by the bank increases it.

Step2: Determine the journal - entry items

The note collected by the bank means the company's notes receivable are now collected and cash is increased. The journal entry for the note collected by the bank is a debit to Cash and a credit to Notes Receivable. The bank service fee is an expense, so it is a debit to Service Fee Expense and a credit to Cash. The NSF check is a reduction in cash and an increase in accounts receivable (since the company thought it had received payment but it bounced).

The relevant transactions for the company's cash - balance update are the note collected by the bank and the bank service fee. When the bank collects a note for the company, the company should debit Cash and credit Notes Receivable. When the bank charges a service fee, the company should debit Service Fee Expense and credit Cash.

The entry to update the company's cash balance after bank reconciliation for the note collected by the bank will include a debit to Cash and a credit to Notes Receivable.

Answer:

Debit to Notes Receivable is incorrect as the correct entry for the note collected is a credit to Notes Receivable and a debit to Cash. Debit to Accounts Receivable is for the NSF check situation, not for the overall cash - balance update related to the note collection and service fee. Credit to Service Revenue is not relevant here. Credit to Service Fee Expense is incorrect as service fee is an expense and should be debited. There is no correct option among the given ones based on the full analysis of the bank - reconciliation entries. But if we consider only the note - collection aspect among the given options, the closest related account is Notes Receivable and the correct action for the note collection is to credit it when the bank collects it on behalf of the company. However, if we assume the question is asking about the overall cash - balance update and we focus on the note - collection and service - fee transactions, the main entry related to the note collection is a credit to Notes Receivable (when the bank collects the note) and a debit to Cash, and for the service fee, a debit to Service Fee Expense and a credit to Cash. So, based on the note - collection part among the given options, the answer is that none of the options are correct in a comprehensive sense, but if we consider only the note - collection aspect and the accounts involved, the correct action is to credit Notes Receivable when the bank collects the note for the company. If we assume the question has an error and we focus on the note - collection entry, the answer is that the entry for the note collection includes a credit to Notes Receivable (not listed as an option) and a debit to Cash. If we have to choose from the given options, none of them are correct for the overall cash - balance update after bank reconciliation considering all relevant transactions.