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Do debit memos, credit memos, and NSF checks effect the book side or bank side of the bank reconciliation?

• I have a question I am trying to answer and cannot seem to figure it out...i basically have to tell whether each of the items effects the book side or bank side of the bank reconciliation. Here are the items: a. outstanding checks b. debit memos c. NSF checks d. unrecorded deposits e. interest on cash balance f. credit memos g. bank service charges Here is what I think so please let me know what I should change A. bank side B. book side C. book side D. bank side E. Bank side F. book side G. bank side

• Answer:

  To help you learn, think about where the info for each items comes from, or who knows about each item first. a. Outstanding checks - already on the books, so the bank side must be adjusted. b. debit memos - The bank sends them to the account holder, so the book must be adjusted c. NSF checks - the company thought they had money in the bank, the bank tells them, "No, you don't." The book must be adjusted. d. unrecorded deposits - The bank knew the deposit was made. The book doesn't have it listed. Adjust the book. e. interest on cash balance - the bank knew how much, the company finds out from the bank statement and adjusts the book f. credit memos - the bank tells the company, adjust the book g. service charges - the bank tells the company how much, adjust the book. Good luck!