Question

during the month of july, clanton industries issued a check in the amount of $845 to a supplier on account. the check did not clear the bank during july. in preparing the july 31 bank - reconciliation, the company should: multiple choice add the check amount to the book balance of cash deduct the check amount from the bank balance add the check amount to the bank balance make a journal entry in the company records for an error deduct the check amount from the book balance of cash

Explanation:

When a company issues a check that has not cleared the bank during the bank - reconciliation period, the company has already recorded the check as a reduction in its cash balance (book balance). But the bank has not yet deducted the amount. So, to reconcile the bank balance with the book balance, the company should deduct the check amount from the bank balance to account for the outstanding check.

Answer:

B. Deduct the check amount from the bank balance