Read and reply to question #31 from webpage 156. You must respond to for least a pair of your classmates' postings to obtain full credit.
What effect does a charge memo in a bank declaration have around the Cash accounts? A traditional bank debit idiota is a great entry within the bank assertion refers to a deduction from the account's stability. Edmonds (2010) explains, " Since a checking account is definitely an asset (cash) to the depositor, a bank statement debit memo takes a credit entry to the money account around the depositor's books”. (p. 145). For example , whenever I use my own debit credit card, the amount is definitely applied straight to my checking account subtracting the amount from my personal available balance. If a charge memo in the amount of $50 for bank charge such as too little funds, it decreases the balance by $50. The businesses cash account should be credited since the businesses property account was reduced.
What effect will do a credit memo in a bank statement include on the Money account?
A credit memo is the opposing of the charge memo because it is a type of purchase that raises or adds money for the account. In respect to Edmonds (2010), " Bank declaration credit memos describe actions that boost the customer's account balance (the bank's liability) (p. 145). For example , every fourteen days, my work directly debris my salary into my bank account therefore increasing my bank account equilibrium. Edmonds (2010) states, " When a traditional bank tells you that this has awarded your account, you can debit your money account in response” (p. 145). Credit rating memos can occur from several reasons such as interest coming from bank loans or can even be by a bank error or a refund.
Edmonds, T. Survey of Accounting, 2nd Model (2nd ed). McGraw-Hill Primis Custom Creating.