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Hazelton Manufacturing prepares a bank reconciliation at the end of every month. At the end of May, the general ledger checking account showed a balance of $1,360, and the bank statement showed a bank balance of $1,445. Outstanding checks totaled $350, and deposits in transit were $150. The bank statement listed service charges of $30 and NSF checks totaling $85. The journal entry to correct cash will include: (Points : 4)

A). a debit of $115.

B). a credit of $115.

C). a debit of $230.

D). a credit of $85.

Respuesta :

Answer:

Option (A) is correct.

Explanation:

Correct balance:

= Bank balance on bank statement + Back deposits in transit - outstanding checks

= $1,445 + $150  - $350

= $1,245

So our checking accounting shows a balance of $1360, but the correct balance is $1245.

Hence, the difference between the two is $115.

Therefore, this means that we would debit $115 back to cash.

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