When preparing a bank reconciliation, under which circumstance must you sign a deposit slip?

• A. When making a deposit at the bank to verify the transaction
• B. When reconciling outstanding checks on the bank statement
• C. When adjusting for bank service charges in the ledger
• D. When recording interest earned in the cash book

Answer: (A)

Verified step by step guidance

1. Understand the purpose of a bank reconciliation: It is a process to ensure that the company's cash records match the bank's records, identifying discrepancies such as outstanding checks, deposits in transit, or bank service charges.
2. Review the options provided in the problem and identify the context of signing a deposit slip. A deposit slip is typically signed when making a deposit at the bank to verify the transaction.
3. Clarify the role of a deposit slip: It serves as proof of the deposit made and is signed to confirm the accuracy of the transaction details, such as the amount deposited and the account number.
4. Eliminate the other options: Signing a deposit slip is not required when reconciling outstanding checks, adjusting for bank service charges, or recording interest earned, as these activities involve internal record-keeping rather than direct interaction with the bank.
5. Conclude that signing a deposit slip is specifically tied to the act of making a deposit at the bank to verify the transaction, ensuring the deposit is accurately recorded by the bank.