Following are seven items a through g that would cause Xavier Company\'s book ba
ID: 2452594 • Letter: F
Question
Following are seven items a through g that would cause Xavier Company's book balance of cash to differ from its bank statement balance of cash.
a. A service charge imposed by the bank.
b. A check listed as outstanding on the previous period's reconciliation and still outstanding at the end of this month.
c. A customer's check returned by the bank is marked "Not Sufficient Funds. (NSF)"
d. A deposit that was mailed to the bank on the last day of the current month and is unrecorded on this month's bank statement.
e. A check paid by the bank at its correct $190 amount was recorded in error in the company's Check Register at $109.
f. An unrecorded credit memorandum indicated that bank had collected a note receivable for Xavier Company and deposited the proceeds in the company's account.
g. A check was written in the current period that is not yet paid or returned by the bank. Indicate where each item a through g would appear on Xavier Company's bank reconciliation by placing its identifying letter in the parentheses in the proper section of the form below.
Explanation / Answer
Book statement of cash
Less:
A service charge imposed by the bank
Interest charges for cheque not cleared due to insufficient balance
Deposit
Wrong amount cheque (190-109) 81
Bank statement cash balance
Add: Deposit mailed not recorded
Note receivable
Service charges imposed by bank
Less:
Cheque outstanding on previous balance
Current month cheque