Question
ABC Companys bank statement shows a balance of $20,000 as of December 31, while the companys ledger shows a balance of $18,500. Identify and explain
ABC Company’s bank statement shows a balance of $20,000 as of December 31, while the company’s ledger shows a balance of $18,500. Identify and explain the necessary adjustments given the following discrepancies: |
- Outstanding checks: $2,000 |
- Deposits in transit: $1,000 |
- Bank service charges: $50 |
- NSF (non-sufficient funds) check: $450 |
Prepare the bank reconciliation statement and the adjusting entries for ABC Company’s books. Discuss the importance of regular bank reconciliations for internal control. |
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
18th edition
125969240X, 978-1259692406
