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Identify Each of the Following Reconciling Items as (A) an Addition

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Essay

Identify each of the following reconciling items as (a) an addition to the cash balance according to the bank statement, (b) deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company's records, or (d) a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Also, indicate by writing "entry" by those items that will require a journal entry in the company's accounts.
1.Deposits in transit.
2.Bank service charges.
3.NSF check.
4.Outstanding checks.
5.Check for $690 incorrectly recorded by the company as $960.
6.Check for $420 incorrectly recorded by the company as $240.


Definitions:

Statement Of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Net Cash

The total amount of cash available after all cash inflows and outflows have been accounted for during a specific period.

Financing Activities

Transactions involving obtaining resources from creditors and repaying them, as well as equity transactions with investors.

Net Cash

The amount of cash available after accounting for cash inflows and outflows over a period.

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