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Homework answers / question archive / While preparing bank reconciliation statement, how do you treat bank errors that understate the bank statement balance? a
While preparing bank reconciliation statement, how do you treat bank errors that understate the bank statement balance? a. Add with balance as per cash book b. Deduct from balance as per bank statement c. Add with balance as per bank statement d. Deduct from balance as per cash book Clear my choice Next page fonSolved 1.1 What is a conceptus Jump to w ASS
While preparing bank reconciliation statement how do you treat bank errors that understate the bank statement balance
Answer (d) deduct from the balance as per cash book
When there is bank error and the balance as per bank statement is understated we have to deduct the amount from the balance as per the cash book in order to arrive at the balance as per bank statement. This is applicable only when we start with the balance as per cash book and want to arrive at the balance as per bank statement.
If we start with the balance as per bank statement then we have to add the amount understated to arrive at the balance as per cash book.
