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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:

A) Make a journal entry in the company records for an error.
B) Add the check amount to the book balance of cash.
C) Deduct the check amount from the bank balance.
D) Deduct the check amount from the book balance of cash.
E) Add the check amount to the bank balance

Respuesta :

Answer:

C) Deduct the check amount from the bank balance.

Explanation:

Since in the question, it is given that the check is issued for $845 to a supplier on account but the same is not cleared in the bank during the month of July

So in order to prepare the bank reconciliation for the July month, the company should deduct the check amount from the bank balance as the same amount is already deducted from the books and to balance both the books we have to deduct the amount.

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