Expert Answers

1. Classify the following items as (a) an addition to the bank balance, (b) a subtraction from the bank balance, (c) an addition to the book balance, or (d) a subtraction from the book balance:
$20 in service charges
A $300 check deposited that was returned NSF
An outstanding check that you wrote for $2,000
A deposit in transit of $5,500
Bank Error: the bank credited your account for a deposit made by another customer

2. During 2011, Jimmy Enterprises completed the following transactions:
a. Sales revenue on account, $550,000.
b. Collections on account, $325,000
c. Write-offs of uncollectible, $13,000
d. Uncollectible account expense, 5% of sales revenue
1. Prepare the journal entries for the above transactions.