Question

Which of the following is the correct adjusting entry for the account holder when the bank submits a debit memorandum for a monthly service charge of $30?a) Loss on Bank Transactions 30Cash 30b) Miscellaneous Expense 30Cash 30c) Cash 30Account Revenues 30d) Cash 30Bank Service Fee 30

Answer 1

Answer:

b) Miscellaneous Expense 30 Cash 30

Explanation:

As we have to record the adjusting entry for a monthly service of $30

So the adjusting entry is

Miscellaneous Expense $30

         To Cash $30

(Being the monthly service charges is recorded)

Since there is a monthly service charges so the miscellaneous expense is debited and the cash is credited since it reduces the cash amount