Asked by Emily Lutsock on Jun 17, 2024
Verified
The amount of deposits in transit is included on the bank reconciliation as a (n)
A) deduction from the balance per the company's books
B) deduction from the balance per bank statement
C) addition to the balance per bank statement
D) addition to the balance per company books
Deposits In Transit
Refers to cash and checks that have been received and recorded by an entity but have not yet been deposited in the bank account.
Bank Reconciliation
The process of matching and comparing figures from the accounting records against those presented on a bank statement to see if they are consistent.
Company Books
Official records maintained by a business documenting its financial transactions and activities.
- Familiarize oneself with the approach to managing outstanding checks and undeposited funds in the course of bank reconciliations.
Verified Answer
CM
Celestine MbouhJun 23, 2024
Final Answer :
C
Explanation :
Deposits in transit are those deposits which have been made by the company but have not yet been recorded by the bank. Therefore, they will not be included in the balance per bank statement. They represent funds that the company is entitled to and therefore should be added to the balance per bank statement to arrive at the correct/cleared balance.
Learning Objectives
- Familiarize oneself with the approach to managing outstanding checks and undeposited funds in the course of bank reconciliations.