Entries for Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31, $20,330.
2. Cash balance according to the bank statement at August 31, $21,200.
3. Checks outstanding, $4,130.
4. Deposit in transit not recorded by bank, $3,310.
5. A check for $340 in payment of an account was erroneously recorded in the check register as $430.
6. Bank debit memo for service charges, $40.

Journalize the entries that should be made by the company that (a) increase cash and (b) decrease cash.

a. 20Y6 Aug. 31	Cash	fill in the blank 2	fill in the blank 3
	Accounts Payable	fill in the blank 5	fill in the blank 6
b. Aug. 31	Miscellaneous Expense	fill in the blank 8	fill in the blank 9
	Cash	fill in the blank 11	fill in the blank 12

Feedback

Keep in mind that the company needs to journalize any adjusting items in the company section of the bank reconciliation, because these have not been previously recorded by the company. Debit memo items like bank service charges decrease Cash. If the company made an error that understates cash in the company section, the journal adjustment would increase Cash.