Which items should be added to the cash account during reconciliation?

When reconciling the cash account, one key element to focus on is the adjustments needed to accurately reflect the actual cash position. Credit memoranda from the bank represent amounts that have been credited to the bank account but have not yet been recorded in the company's books. This could include various transactions such as interest earned or direct deposits that were processed by the bank.

Adding the credit memoranda to the cash account during reconciliation is necessary because it ensures that the cash balance reflects all available funds. The company’s records would otherwise be understated, failing to account for these additional funds deposited by the bank. Thus, including this information during the reconciliation process is essential for maintaining accurate financial records.

In contrast, items like bank fees, NSF (non-sufficient funds) checks, and returned checks should typically be deducted from the cash account because they represent outflows or reductions in the cash balance. Understanding the nature of these transactions is crucial for effective cash management and accurate financial reporting.