Analyze errors in a bank reconciliation. Rimes Restaurant makes large cash depos

Question

Analyze errors in a bank reconciliation. Rimes Restaurant makes large cash deposits daily. The bookkeeper recorded one of the daily deposits as $5,700 in the company’s records, but the bank statement showed that the deposit as $7,500. After checking the day’s restaurant receipts and the original deposit slip, the bookkeeper realized the bank was correct and that he had transposed the digits when he recorded the transactions. How should this be handled on the bank reconciliation? Show what Rimes should record to correct its books.


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Explanation / Answer

The company had entered $5700 in its Cash account, but the bank statement showed the correct amount: $7500. The transaction involved the cash sales for the day. As a result the company's Cash account will have to be increased by $(7500 - 5700)

Date Account Name Debit Credit
Cash $1800
Sales $1800

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