Problem:
A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period.
Required:
As a result, in preparing this period's reconciliation, the amount of this deposit should be:
- Added to the book balance of cash.
- Deducted from the book balance of cash.
- Added to the bank balance of cash.
- Deducted from the bank balance of cash.
- Not included as a reconciling item.