Assuming the Account Is Not in Overdraft, When Reconciling the Ledger

question 51

Multiple Choice

Assuming the account is not in overdraft, when reconciling the ledger with the bank statement a deposit in transit should be:

• A) added to the general ledger bank balance.
• B) subtracted from the general ledger bank balance.
• C) added to the bank statement balance in the reconciliation.
• D) subtracted from the bank statement balance in the reconciliation.

---

Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Reversed

Changed to the opposite direction, order, position, or condition, often referring to financial transactions or entries.

Adjusting Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Reversing Entries

are journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries from the end of the previous period.