Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliation? Service charge $12, Outstanding checks $145, Interest $3.50, Deposit in transit $80 Question 6 options: $145 $12 $157 $148. 50

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Business

Draven

2 September, 22:19

Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliation? Service charge $12, Outstanding checks $145, Interest $3.50, Deposit in transit $80 Question 6 options: $145 $12 $157 $148. 50

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Answers (1)

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Leila Watkins · Answer 1

outstanding checks of $145 would be subtracted

Explanation:

An outstanding check is a check that has been issued and recorded by the issuing body in its ledger book as a debit but it has not reflected as a debit on the bank balance side of the Account i. e it hasn't been cleared by the Bank for payment. hence for a proper account reconciliation between the bank balance side of a checking account and the customer side of the checking account the total amount of the outstanding check has to be manually subtracted from the ban balance.

The service charge, interest rate are automatically registered in both bank balance and customer balance while deposit in transit is registered only on the customers account balance and can't be subtracted instead it should be added to the bank balance.