Question

3.What book reconciling item that refers to deposits credited by the bank to the account of the depositor but not yet recorded by the depositor as cash receipts?

4.If the company recognize a depreciation expense during the month, would this affect the cash account balance?

Answer 1

3) The bank reconciliation statement is prepared with a view to finding the various reasons behind the mismatch of the cash balance in the bank statement and the cash balance in the firm's books of accounts. The time difference in recording an entry is one of those reasons, the error where the bank deposited the money in depositor's account, but not recorded by the depositor in his books of accounts would generally fall under this category.

4) The depreciation may be defined as a decrease in the value of an asset due to regular use, the passage of time, or regular wear and tear. It is a non-cash expense, thus, it would not affect the cash account balance at balance-sheet.