The bank charged a service fee of $55. How would this information be included on the bank reconciliation?
A deduction on the book side
The bank service fee of $55 would be included on the bank reconciliation as a deduction or “less” item in the section labeled “Bank Service Charges” or “Miscellaneous Expenses”. This is because the service fee is a banking expense charged by the bank to the account holder for the services it provides. Thus, it will reduce the balance of the company’s account.
The reconciliation process involves comparing the company’s records of cash transactions with the bank’s records. If the bank has charged a service fee that is not reflected in the company’s records, the bank service fee must be added to the company’s books. However, if the company has already recorded the bank service fee, it should be deducted from the company’s balance on the reconciliation.
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