Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

In a bank reconciliation, which of the following items would be subtracted from the company's book balance to arrive at the adjusted book balance?

Interest earned

Deposits in transit

Outstanding checks

Bank service charges

Previous problemNext problem

Verified step by step guidance

Understand the concept of bank reconciliation: Bank reconciliation is the process of comparing the company's book balance (as per its accounting records) with the bank statement balance to identify discrepancies and make adjustments.

Identify the items that affect the company's book balance: Items such as interest earned, bank service charges, and other adjustments directly impact the company's book balance, while deposits in transit and outstanding checks affect the bank statement balance.

Determine the impact of each item: Interest earned increases the book balance, deposits in transit increase the bank statement balance, outstanding checks decrease the bank statement balance, and bank service charges decrease the book balance.

Focus on the adjustment to the book balance: Since the question asks for items subtracted from the company's book balance, bank service charges are the correct adjustment because they represent fees charged by the bank that reduce the company's cash balance.

Conclude the adjustment process: Subtract bank service charges from the company's book balance to arrive at the adjusted book balance, ensuring all other relevant adjustments are accounted for.