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




Check Number		DateDescriptionAmount DebitedAmount CreditedBalance

5/7ATM\$2.00\$60.00\$378.00

242		5/7Grocery\$32.50\$345.50

5/8Paycheck\$1,200.00\$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?


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

Verified Answer :

  • Start with the correct initial balance of \(\$320.00\).
  • Calculate the sequence of transactions: subtract \(\$62.00\) (withdrawal + fee) to get \(\$258.00\), subtract \(\$32.50\) for groceries to get \(\$225.50\), and add \(\$1,200.00\) for the paycheck to arrive at \(\$1,425.50\).
  • Compare the ledger's sequence; note the ATM withdrawal of \(\$60.00\) was recorded as a credit instead of a debit.
  • Identify the error: \(\boxed{\text{Adrienne did not enter her ATM withdrawal correctly.}}\)

Explanation

  1. Analysis of the Transactions and Ledger Table

We are given an initial account balance of \(\$320.00\) and a set of transactions to verify against a provided ledger table. The transactions include an ATM withdrawal of \(\$60.00\) with a \(\$2.00\) fee, a grocery store purchase of \(\$32.50\), and a paycheck deposit of \(\$1,200.00\). The goal is to determine why the balance in the table is incorrect.

  1. Calculating the Correct Account Balance

Let's calculate the correct balance progression starting from the initial amount of \(\$320.00\):

  1. ATM Transaction: This consists of a withdrawal of \(\$60.00\) and a fee of \(\$2.00\). Both are debits. The correct balance after this transaction should be:

\(\$320.00 - \$60.00 - \$2.00 = \$258.00\).

  1. Grocery Purchase: This is a debit of \(\$32.50\). Subtracting this from our correct balance:

\(\$258.00 - \$32.50 = \$225.50\).

  1. Paycheck Deposit: This is a credit of \(\$1,200.00\). Adding this to our balance:

\(\$225.50 + \$1,200.00 = \$1,425.50\).

The correct final balance should be \(\$1,425.50\).

  1. Identifying the Discrepancy

Now compare this with the table provided:

  • The table lists the ATM transaction as a \(\$2.00\) debit and a \(\$60.00\) credit, resulting in a balance of \(\$320.00 - \$2.00 + \$60.00 = \$378.00\).
  • The table then correctly subtracts the \(\$32.50\) grocery expense (\(\$378.00 - \$32.50 = \$345.50\)) and adds the \(\$1,200.00\) paycheck (\(\$345.50 + \$1,200.00 = \$1,545.50\)).

The discrepancy stems entirely from the first entry. Adrienne recorded the \(\$60.00\) ATM withdrawal as a credit (an addition to her balance) instead of a debit (a subtraction from her balance). This is why her balance is incorrect.

  1. Conclusion and Final Answer Selection

Based on the analysis, the reason for the error is clearly that the ATM withdrawal was entered incorrectly. Comparing this to the provided options, the correct explanation is: "Adrienne did not enter her ATM withdrawal correctly." The final answer is the fourth option.

Examples

Understanding how to correctly record debits and credits in a ledger is fundamental for managing personal or business finances. Misclassifying a withdrawal as a deposit, as seen in this example, leads to significant cumulative errors. By systematically verifying ledger entries against receipts—subtracting all outflows and adding all inflows—one can maintain accurate financial records and avoid balance discrepancies in everyday tasks like banking or budgeting.

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