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When planning the process of preparing a bank reconciliation it is noted that under normal circumstances only one section of the examine may generate additional entries on the books of the account holder.Which of the following items would cause an entry on the books on the account holder after reviewing and preparing their bank reconciliation?AnswerA. $1,200 of outstanding checks that have not cleared the bank yet.B. $650 of deposits in transit that have not yet been recorded by the bank, but were dropped off in the deposit box last night.C. A $66 check written to Builder's Depot that hasn't cleared the bank yet.D. $8.65 worth of interest deposited into the account of the account holder by the bank on a maturing Certificate of Deposit. This is the first time that the account holder is aware of the interest deposit for the semiannual period.
Please utilize the previous question regarding the preparation of a bank statement and any necessary correct answers to address the following question.What would be the journal entry that would need to be recorded on the books of the account holder once the bank reconciliation is completed?
Item Account Name Post Ref DEBIT CREDIT1 Cash $8.65Interest Revenue $8.65
2 Deposits in Transit $650Cash $650
3 Cash $1,200Accounts Receivable $1,200
4 Accounts Payable-Home Depot $66Cash $66AnswerA. Item # 4 is the correct journal entryB. Item # 1 is the correct journal entryC. Item # 2 is the correct journal entryD. Item # 3 is the correct journal entry
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