The bank statement ending balance is $45 lower than the general ledger bank balance. On the bank statement, there is a line item

Question

2 months ago

6

The bank statement ending balance is $45 lower than the general ledger bank balance. On the bank statement, there is a line item

for bank charges and fees of $45.
How should the adjustment be recorded in the general ledger?

1. Debit Bank fee expense$45 and Credit bank account $45

2. Debit bank account $45 and Credit bank fees expense $45

3. Debit retained earnings $45 and Credit bank account $45

4. Debits bank fees expense $45 and Credit retained earnings $45

5. Debit bank account $45 and Credit retained earnings $45

Business

2 answers:

Free_Kalibri [3.7K] · Answer 1 · 2026-03-01T15:31:39+03:00

Free_Kalibri [3.7K]2 months ago

8 0

Response:1

Clarification:

Katen [3.5K] · Answer 2 · 2026-03-01T15:32:12+03:00

Answer:

A general ledger adjustment should reflect: 1. Debit Bank Fee Expense $45 and Credit Bank Account $45.

Explanation:

The discrepancies between the Cash Book Bank Balance and the Bank Statement Balance often arise due to Unrecorded Items.

The bank's charge of $45 appears in the Bank Statement but was not documented in the Cash Book.

Thus, the appropriate adjustment is to reduce the Cash Book - Bank Balance and acknowledge this expense in the Income statement pertaining to these Bank Charges.