Question

If the company's accountant mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a(n):

a)$27 addition to the book balance
b)$85 deduction from the book balance
c)$27 deduction from the book balance
d)$85 addition to the book balance

Answer 1

The error of recording a $58 deposit as $85 would be corrected as a $27 deduction from the book balance on the bank reconciliation.

Step-by-step explanation:

If the company's accountant mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a $27 deduction from the book balance. This is because the book balance is currently overstated by $27 (the difference between $85 recorded and the actual deposit of $58). The bank reconciliation process involves adjusting the book balance for errors, outstanding checks, deposits in transit, and other discrepancies to reconcile it with the bank statement balance.