You Are in the Process of Preparing a Bank Reconciliation

question 141

Essay

You are in the process of preparing a bank reconciliation for Charter Boat Company as of May 31. Listed below is information necessary to prepare the reconciliation.
Required:
In the spaces provided, place the appropriate letter to indicate whether each item of information should be
a.deducted from the balance per bank statement
b.added to the balance per bank statement
c.deducted from the balance per company records
d.added to the balance per company records
e.omitted from the reconciliation

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Definitions:

Required Reserve Ratio

The percentage of deposits that banks are legally required to keep on hand as reserves, not loaned out.

Excess Reserves

Excess reserves are the capital reserves held by banks beyond the required minimum, often placed with central banks, earning interest.

Money Supply

The total amount of monetary assets available in an economy at a specific time, which includes cash, coins, and balances held in checking and savings accounts.

Time Deposits

Time deposits are bank deposits with a fixed term or maturity date, where the depositor agrees not to withdraw the funds until that date, typically earning a higher rate of interest.