Table of contents

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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 is shown as an addition to the bank balance on a bank reconciliation?

Outstanding checks

Deposits in transit

Bank service charges

NSF (non-sufficient funds) checks

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Verified step by step guidance

Understand the purpose of a bank reconciliation: It is a process used to match the bank statement balance with the company's cash account balance, identifying any discrepancies.

Identify the items that affect the bank balance: The bank balance is adjusted for items that the bank has not yet recorded but the company has, such as deposits in transit and outstanding checks.

Define 'deposits in transit': These are deposits made by the company that have not yet been processed or recorded by the bank. They increase the bank balance once recorded.

Analyze the options: Outstanding checks reduce the bank balance, bank service charges and NSF checks reduce the company's book balance, while deposits in transit are added to the bank balance.

Conclude that deposits in transit are shown as an addition to the bank balance on a bank reconciliation because they represent funds that will increase the bank's balance once processed.