Which type of transaction may either be added or subtracted while adjusting a bank balance?

A. Outstanding checks
B. Deposits in transit
C. Interest earned
D. Bank errors

1 answer

The correct answer is D. Bank errors.

Bank errors can either increase or decrease the bank balance depending on whether the bank made an error that resulted in an underpayment or overpayment of the account.

Outstanding checks and deposits in transit are typically adjustments made in one direction only (subtracting for outstanding checks and adding for deposits in transit), while interest earned is always added to the balance.