Question

Great Falls Co's bank reconciliation as of February 28 is shown below $38,153 +745 -35 $37,643 Book balance Bank balance + Deposit in transit 2,950 Note collection -1,730 Check printing Outstanding checks Adjusted bank balance 538,863 $38,863 Adjusted book balance
One of the adjusting journal entries that Great Falls must record as a result of the bank reconciliation includes______________.

a. Debit Cash $2,950; credit Accounts Receivable $2,950.
b. Debit Miscellaneous Expense $35; credit Accounts Payable $35.
c. Debit Cash $745; credit Note Receivable $745.
d. Debit Cash $2,950; credit Sales $2,950.
e. Debit Note Payable $745; credit Cash $745.

Answer 1

Answer:

c. Debit Cash $745; credit Note Receivable $745.

Explanation:

It is very difficult to understand your question since it is typed in a very complex manner. I have attached a screen shot that contains the similar question, it helped me and will help others to understand the data given.

a. This entry has already been recorded in the company's accounts. It should be reconciled with the Bank Account.

b. A miscellaneous expense has been incurred but it was paid and not on credit.

c. Correct Entry. As you can see that a Note Receivable has been collected by bank from customer. So, we have to increase the Cash balance by debiting it and remove the receivables by crediting it.

d. Sales transaction is never a part of Bank Reconciliation.

e. $745 has been collected from customer and not paid to vendor. The amount paid is $1,730 which is already recorded in the Books.