required: select whether the following items would be added (+) or subtracted (-) from the company’s books…
required: select whether the following items would be added (+) or subtracted (-) from the company’s books or the bank statement side of a bank reconciliation.\nreconciling item bank statement company’s books\n a. outstanding checks of $12,000\n b. bank service charge of $15\n c. deposit in transit of $2,300\n d. interest earned of $5
Answer
Explanation:
Step1: Analyze outstanding checks
Outstanding checks have been issued by the company but not yet cleared by the bank. So, they are subtracted from the bank statement balance. So for the bank statement side, it's (-), and not relevant for the company's books adjustment in this context.
Step2: Analyze bank service charge
Bank service charge is a deduction from the company's account that the company may not have recorded yet. So, it's subtracted from the company's books balance and not relevant for the bank statement adjustment in this context. So for the company's books side, it's (-).
Step3: Analyze deposit in transit
Deposit in transit has been made by the company but not yet recorded by the bank. So, it's added to the bank statement balance. So for the bank statement side, it's (+), and not relevant for the company's books adjustment in this context.
Step4: Analyze interest earned
Interest earned is income for the company that the bank has likely recorded but the company may not have. So, it's added to the company's books balance and not relevant for the bank statement adjustment in this context. So for the company's books side, it's (+).
Answer:
| Reconciling Item | Bank Statement | Company's Books |
|---|---|---|
| a. Outstanding checks of $12,000 | - | |
| b. Bank service charge of $15 | - | |
| c. Deposit in transit of $2,300 | + | |
| d. Interest earned of $5 | + |