what effect does a credit memo in a bank statement have on the cash account?

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   you are an honest man

   Answer by satish mahajan 557 days ago

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   A bank credit memo is an item on a company’s bank statement that increases a company’s checking account balance. A bank debit memo is an item on the bank statement that reduces the company’s checking account balance. Since these items are already on the bank statement, the only adjustment that could be required is in the company’s accounting records. The old rule for the bank reconciliation “Put it where it isn’t” means that the bank’s credit memo amount must be added to the company’s accounting records, if it is not yet in the company’s accounts. Since the bank credit memo increased the checking account balance, the company’s Cash account will have to be debited and another account will need to be credited. For example, if the bank statement shows a credit memo for Rs.100 for interest earned, the company will need to have a debit of $100 in its Cash account and will need a credit of Rs.100 in Interest Revenue or Interest Income.

   Answer by Chandni 555 days ago