Question

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation? subtract $45 from the bank's balance. add $45 to the bank's balance. subtract $45 from the book balance. add $45 to the book balance. subtract $45 from the bank's balance and add $45 to the book's balance.

Answer 1

Answer:

add $45 to the book balance.

Explanation:

As the mistake was in our accounting we will do the adjustment on our books only:

we should decrease our account by (749)

but instead we decrease it by            (794)

(749) - (794) = 45 the difference will positive in favor of the cash acccount. So, we will increase the book balance.