Question

Indicate whether the firm should add or subtract each item below from its balance of cash or the bankâs balance of cash in preparing a bank reconciliation. The first answer is provided as an example. (Select "No entry" if an item is not a reconciling item.)
Reconciliation Items Bank Balance Company Balance
1. Checks outstanding Subtract No entry
2. NSF checks
3. Deposit recorded twice by company
4. Interest earned
5. Deposits outstanding
6. Bank service fees

Answer 1

Answer:

Explanation:

Bank Reconciliation: The Bank reconciliation deals with the balance of the bank statement and the balance of the cash statement. The aim is to compare those two statements to allow the organization to run smoothly.  

There are specific transactions because of which the balance of the bank statement and the balance of the cash statement do not match. We change the transactions accordingly to match those statements

So, the items are presented below:       Bank Balance     Company Balance

1. Checks outstanding                              Subtract               No entry

2. NSF checks                                            No entry               Subtract

3. Deposit recorded twice by company   No entry               Subtract

4. Interest earned                                      No entry                Add

5. Deposits outstanding                            Add                      No entry

6. Bank service fees                                 No entry              Subtract