Question

In a bank reconciliation, the electronic funds transfer (EFT) received by the bank from a customer's note receivable owed to the company is ______.

a) Added to the book balance

b) Deducted from the book balance

c) Added to the bank balance

d) Deducted from the bank balance

Answer 1

In a bank reconciliation, an EFT received by the bank for a customer's note receivable is added to the book balance to reflect the increase in the company's cash assets.

Step-by-step explanation:

In a bank reconciliation, the Electronic Funds Transfer (EFT) received by the bank from a customer's note receivable owed to the company is added to the book balance. An EFT represents funds that have been collected and confirmed by the bank but may not yet be recorded in the company's books. To reconcile the company's records with the bank's records, this transaction should be added to the company's ledger to reflect the increase in cash assets due to the received payment. The purpose of the bank reconciliation is to ensure that the company's cash records match the bank statement, accounting for any differences between the two, such as deposits in transit or outstanding checks.