Danah Inc has a 12/31/2017 cash balance of $5,300. The 12/31/2017 bank statement showed a balance of $5,210. The difference between cash balance and the bank statement is with check 850. Danah Inc. correctly recorded the check (paid to an employee for a salary) for $1,010. The bank incorrectly recorded the check for $1,100. Prepare all journal entries necessary to correct the bank error. Provide brief explanation.
Answer. No adjusting entry is passed for the bank error in the books of Danah Inc.
Explanation
Journal enntry is only passed for the adjustment required in the book balance as this is the adjustmetn required in the bank books. Hence, no adjustment is required to be made in the business books.
The Only thing is the difference amount of $90 shall be added in the bank balance while making the Bank reconciliation statement to arrive at the adjusted balance as per bank statement.
Get Answers For Free
Most questions answered within 1 hours.