Question

The bank statement ending balance is $45 lower than the general ledger bank balance. On the bank statement, there is a line item for bank charges and fees of $45. 

How should the adjustment be recorded in the general ledger? 

SELECT ONLY ONE 

• Debit Bank Fees Expense $45 Credit Retained Earnings $45 

• Debit Bank Fees Expense $45 Credit Bank Account $45 

• Debit Bank Account $45 Credit Retained Earnings $45 

• Debit Retained Earnings $45 Credit Bank Account $45 

• Debit Bank Account $45 Credit Bank Fees Expense $45

Answer 1

Solution:

The following adjustment should be recorded in General Ledger:

Account title	Debit	Credit
Bank Fees Expenses	45
Bank Account		45

Hence, second option is correct.

• Debit Bank Fees Expense $45 Credit Bank Account $45