Level 4: Receivables and payables · Exercise 47 of 72 · Pro

Bank reconciliation adjustments

A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.

The task

Quarry Street Dental finishes its June bank reconciliation. The bank statement shows three items not yet in the books: a $28 monthly service charge, a $615 check from a patient returned as NSF, and $14.50 of interest earned on the account. Record the items that adjust the company's Cash balance in one entry.

What this exercise teaches

The service charge is an expense, and the NSF check means the patient's $615 payment never cleared, so the receivable is reinstated with a debit to Accounts Receivable, not Bad Debt Expense. Interest earned is revenue. Cash falls by $28 + $615 = $643 and rises by $14.50, a net credit of $628.50; showing the increase and the decrease on separate lines is also correct. Deposits in transit and outstanding checks need no entry.

A hint if you get stuck

Only items the bank knew about and the company did not need entries. Fees and a bounced check lower cash; interest raises it. The NSF customer still owes the money.