Question

A check written by the company for $282 is incorrectly recorded by a company as $228. On the bank reconciliation, the $54 error should be added to the balance per books. deducted from the balance per books. added to the balance per bank. deducted from the balance per bank.

Answer 1

Answer:

Deduct from the Balance per Books.

Explanation:

The company has written a check of $228 instead of $282. It means that the Cash Account is overstated by $54, so it must be deducted from the Cash Balance per books to reconcile the Cash Ledger.

There is no need to reconcile the Bank Account since the company has written a check for correct amount but recorded it incorrectly. Such Accounting error is known as Transposition Error.