When reconciling cash balances, what effects do bank service charges have on the ledger cash account?

Bank service charges decrease the ledger cash balance because they represent fees assessed by the bank for maintaining the account or providing services. When these charges are processed, they are deducted from the cash balance in the bank account.

As a result, to accurately reflect the company's available cash, it is necessary to adjust the ledger cash account downwards to account for these charges. This adjustment ensures that the records align with the actual cash available, as failing to recognize these charges would overstate the cash balance.

The concept of reconciling cash balances involves ensuring that the ledger reflects true financial position; thus, acknowledging service fees is crucial for maintaining accurate records.