During the month of July Clanton Industries issued a check i

During the month of July. Clanton Industries issued a check in the amount of $889 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should: Multiple Choice Deduct the check amount from the book balance of cash Add the check amount to the book balance of cash. Deduct the check amount from the bank balance Add the check amount to the bank belence Prev 4 of 5 Next ere to search SAMSUNG

Solution

Deduct the check amount from bank balance.

When the company issued check to the supplier, it must have deducted the bank balance as appearing in its books of account after passing the relevant entry on issuing the check.

Now, since the check has not been cleared by the supplier till the end of the month, The bank has not deducted the amount of 889 from the bank balance.

While preparing reconciliation statement, the check amount will have to be deducted from the bank balance since the amount has already been deducted from the books but not from the bank