The proper treatment of unrecorded deposits (deposits in transit) on a bank reconciliation is to show them as an _______________.

Addition per book balance of cash

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Deduction per book balance of cash

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Addition per bank statement balance

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Deduction per bank statement balance

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Solution

The correct option is C Addition per bank statement balance
Unrecorded deposits (deposits in transit) are those deposits which have been recorded in the cash book but not in the passbook resulting in increasing the balance as per cash book as the cash book has been debited. So, the proper treatment of unrecorded deposits (deposit in transit) on bank reconciliation is to show them as an addition per bank statement/ passbook balance in order to reconcile the two balances.

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