Multiple Choice
On a bank reconciliation, which of the following items would be subtracted from the bank statement balance to arrive at the adjusted bank balance?
31
views
6. Internal Controls and Reporting Cash
Bank Reconciliation
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
8. What was the result of John overdrawing his checking account?
A
The bank automatically closed John's account.
B
John's account balance increased due to interest earned.
C
A bank service charge or overdraft fee was assessed to John's account.
D
John received a credit from the bank for the overdraft.
Verified step by step guidance1
Understand the concept of overdrawing a checking account: Overdrawing occurs when a withdrawal exceeds the available balance in the account, leading to a negative balance.
Recognize the typical consequences of overdrawing: Banks often impose penalties such as overdraft fees or service charges to cover the administrative costs of handling the overdraft.
Analyze the options provided in the problem: Evaluate each statement to determine which aligns with standard banking practices for overdrafts.
Eliminate incorrect options: For example, banks do not typically close accounts immediately for overdrafts, nor do they credit accounts or increase balances due to interest earned in such situations.
Select the correct answer: Based on the analysis, the most accurate consequence of overdrawing a checking account is the assessment of a bank service charge or overdraft fee.
4:57mWatch next
Master Bank Reconciliation:Bank Column with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Bank Reconciliation practice set
Problem sets built by lead tutorsExpert video explanations