Debit Credit Week 2 Read and respond to question 31 from page 156 You must respond to at least two of your classmates postings to receive full credit 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 Question 31 Asks Statement Transaction Balance Rent Notebook Paper Pens Pencils Highlighter Balance 1000 00 500 00 300 00 15 00 1 00 2 00 5 00 177 00 The bank statement I created is an example of debit memos The statement lets us know that we have a certain amount in our account balance banks liabilities to start off with Then the amount being taken from your account is detailed by the The symbol represents a minus sign So for this statement I went from having 1000 00 to having 177 00 just from my debit transactions 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 Credit memos are the opposite of debit memos For example Credit Memo Bank Statement Balance 177 00 Posting Date Transaction Amount New Balance Transaction Description Credit Activities 1 12 09 1 13 09 1 24 09 Deposit 200 00 Transfer from savings 133 00 40 00 Deposit 377 00 510 00 550 00 700 00 The bank statement I created is an example of credit memos 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 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 for the 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 a bank statement debit memo requires a credit entry to the cash account on the depositor s books Edmonds McNair and Tsay 2010 Edmonds T Olds P McNair F Tsay B 2010 Survey of Accounting 2nd Ed New York McGraw Hill Irwin ISBN 9780073379555 Reference
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