Debit/Credit - Week 2Debit/Credit - Week 2Read and respond to question #31 from page 156. You must respond to at least two of your classmates' postings to receive full credit.Question #31 Asks What effect does a Debit Memo in a bank statement have on the Cash account?According to our text a, “Bank statement debit memos describe transactions that reduce/decrease the customer’s account balance” (Edmonds, Olds, McNair, & Tsay, 2010). For example: Statement Transaction Balance 1000.00Rent (500.00)Notebook (300.00)Paper (15.00)Pens (1.00)Pencils (2.00)Highlighter (5.00)Balance 177.00 77The bank statement I created is an example of debit memos.7 The statement lets us know that we have a certain amount in our account balance (banks liabilities) to start off with.7 Then the amount being taken from your account is detailed by the ( ).7 The symbol represents a minus sign.7 So for this statement; I went from having $1000.00 to having $177.00 just from my debit transactions.7 Debit transactions are (banks liability) the cash that is being taken from my account decreasing my balance. (Edmonds, Olds, McNair, & Tsay, 2010).What effect does a Credit Memo in a bank statement have on the Cash account?According to our text a, "Bank statement credit memos describe activities that increase the customer's account balance (banks liability)” (Edmonds, McNair, Tsay 2010).7 Credit memosare the opposite of debit memos.7 For example:Credit Memo Bank Statement: Balance 177.00Posting Date Transaction DescriptionTransaction Amount New Balance7 Credit Activities 7 71/12/09 Deposit 200.00 377.001/13/09 Transfer from savings 133.00 510.001/24/09 Deposit 40.00 550.00 700.00 The bank statement I created is an example of credit memos.7 The statement lets us know that we have a certain amount in our account balance (banks liabilities) to start off with $177.00, as well as the date of the posting (when it went through the bank system).7 The amount being added to your account balance is detailed by transaction description (deposit or transfer). The amount is added to the previous account balance (bank liability), then finally giving us a total forthe account balance (bank liability) for this statement; I went from having $177.00 to having $700.00 just from my credit transactions.As our texts states, "Since a checking account is an asset (cash) to the depositor,7a bank statement debit memo requires a credit entry to the cash account on the depositor's books" (Edmonds, McNair, and Tsay 2010). Reference:Edmonds, T., Olds, P., McNair, F., & Tsay, B. (2010). Survey of Accounting (2nd Ed.). New York: McGraw-Hill Irwin. ISBN:
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