Question

Look at the table below showing an example of a checkbook ledger.

A 6-column table has 3 rows. The first column is labeled check number with entries blank, 242, blank. The second column is labeled date with entries 5/7, 5/7, 5/8. The third column is labeled Description with entries A T M , grocery, paycheck. The fourth column is labeled amount debited with entries 2, 32.50, blank. The fifth column is labeled amount credited with entries 60, blank, 1,200. The sixth column is labeled Balance with entries 378, 345, 1,545.50.

Adrienne has several receipts from recent transactions that she entered in her records. The receipts include an ATM receipt for a $60.00 withdrawal (plus a $2.00 transaction fee), a grocery store receipt for $32.50, and a $1,200 paycheck deposit slip.

When she finishes entering her transactions, Adrienne realizes that her balance is incorrect. Assuming that Adrienne’s beginning account balance was $320.00, why is her balance incorrect?

Adrienne forgot to include the $2.00 ATM transaction fee.
Adrienne did not use $320.00 as her starting balance.
Adrienne deducted $23.50 from her balance instead of $32.50.
Adrienne did not enter her ATM withdrawal correctly.

Answer 1

Answer: Adrienne did not enter her ATM withdrawal correctly.

Explanation: She recorded the ATM as a $60 credit and a $2 debit (net +$58) instead of a $60 withdrawal plus a $2 fee (net −$62). With a $320 starting balance the correct final balance is 320 − 62 − 32.50 + 1200 = $1,425.50, but her ledger shows $1,545.50 (off by $120) because the $60 was entered as a credit instead of a debit.