During a bank reconciliation, if a deposit is recorded by the bank but not in the company's ledger Cash account, how should it be treated?

In the scenario described, when a deposit is recorded by the bank but not in the company's ledger Cash account, the correct approach is to add the deposit to the ledger Cash account balance only.

This is because the deposit reflects an amount that the bank has processed and is already included in the bank's records, thus needing no adjustment there. However, since the company's own records have not yet reflected this deposit, it is essential to update the company's ledger Cash account to ensure it accurately represents the cash position of the business. By adding the amount only to the ledger Cash account, the company's records will align with the amounts that the bank is holding, thus correcting the discrepancy without impacting the bank balance, which is already correct.