Question

Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliation? Service charge $12, Outstanding checks $145, Interest $3.50, Deposit in transit $80 Question 6 options: $145 $12 $157 $148. 50

Answer 1

Answer:

$148. 50

Explanation:

This result is the sum of the $145 and the $3.50.

The $145 from the outstanding check. The outstanding check is the status of a check that has not being cashed for the person or company that can collect the money. Then the bank hast to put aside the money for paying this check.  

The $3.50 of interest are the interest paid by the bank. Thus, this money has to be put aside for the bank as well.

Answer 2

Answer:

outstanding checks of $145  would be subtracted

Explanation:

An outstanding check is a check that has been issued and recorded by the issuing body in its ledger book as a debit but it has not reflected  as a debit on the bank balance side of the Account i.e it hasn't been cleared by the Bank for payment. hence for a proper account reconciliation between the bank balance side of a checking account and the customer side of the checking account the total amount of the outstanding check has to be manually subtracted from the ban balance.

The service charge , interest rate are automatically registered in both bank balance and customer balance while deposit in transit is registered only on the customers account balance and can't be subtracted instead it should be added to the bank balance.