Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliation? Service charge $41, Outstanding checks $295, Interest $12, Deposit in transit $870.

The answer is is outstanding checks of $295

Explanation:

Bank reconciliation is the practice of reconciling balance per general ledger cash book at bank account and balance per bank statement.

Most times there are discrepancies because what might have been debited at month end might not have been recorded by the business due to delay in bank sending message or what might have been recorded in the general ledger cash bank account might not have been recorded by the bank maybe due to downtime problem.

As per bank balance side of bank reconciliation, unpresented check (outstanding checks) will be deducted from the balance per bank statement because this has already been recorded by the business (reduction in balance per general cash at bank account). What can cause this might be delay in suppliers presenting it to the bank for that month. So outstanding checks of $295 will reduce balance per bank statement

Interest, service charge will be on bank statement already because it is directly charged by the bank but might not be on the ledger cash bank account.

Deposit in transit of $870 will increase balance per bank statement