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

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Multiple Choice

Which of the following would be subtracted from the balance per bank on a bank reconciliation?

Interest earned

Outstanding checks

Deposits in transit

Bank service charges

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Verified step by step guidance

Step 1: Understand the purpose of a bank reconciliation. It is a process used to compare the bank statement balance with the company's cash account balance to identify discrepancies and ensure accuracy.

Step 2: Identify the items that affect the balance per bank. These include outstanding checks, deposits in transit, and any errors made by the bank.

Step 3: Recognize that outstanding checks are payments issued by the company but not yet cleared by the bank. These reduce the bank's balance because the funds have been committed but not yet deducted.

Step 4: Note that deposits in transit are amounts deposited by the company but not yet recorded by the bank. These increase the bank's balance and are not subtracted.

Step 5: Understand that interest earned and bank service charges are adjustments to the company's books, not the balance per bank. Therefore, outstanding checks are the correct item to subtract from the balance per bank during reconciliation.