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Unformatted text preview: Service charge 200 After reconciliation $64,500 After reconciliation $64,500 Dec. 31, 2012 Debit Credit Cash 500 Interest Revenue 500 ( Reconcile cash increases ) Dec. 31, 2012 Service Charge Expense 200 Cash 200 ( Reconcile cash decreases ) Requirement 3: Failure to record the interest revenue would cause assets and revenues to be understated by $500. Failure to record the service charge expense causes expenses to be understated and assets to be overstated by $200. The net effect of both transactions is an understatement of assets by $300 and an understatement of stockholders equity (retained earnings) and net income by $300....
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- Spring '08