A company made a bank deposit on September 30 that did not appear on the bank statement dated as of September 30. In preparing the September 30 bank reconciliation, the company should:

A) Deduct the deposit from the bank statement balance.
B) Send the bank a debit memorandum.
C) Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
D) Add the deposit to the book balance of cash.
E) Add the deposit to the bank statement balance.

Question

Oliver Wootten · Accepted Answer

Final Answer : E, Explanation :  Deposits in transit, such as the one described, are amounts that have been recorded by the company but not yet reflected on the bank statement due to timing differences. Therefore, they should be added to the bank statement balance in a bank reconciliation to reconcile the company's book balance of cash with the bank statement balance.

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