Multiple Choice
In the context of bank reconciliation, which of the following accounts does NOT appear on the balance sheet?
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6. Internal Controls and Reporting Cash
Bank Reconciliation
Multiple Choice
XYZ Co. has a cash balance per books of \$12,000. Outstanding checks total \$1,500, and deposits in transit are \$2,000. The bank statement shows a service charge of \$50 and a customer’s NSF check of \$200, both not yet recorded in the books. What is the adjusted cash balance per the books?
A
\$13,250
B
\$11,750
C
\$12,250
D
\$10,250
Verified step by step guidance1
Step 1: Start with the cash balance per books, which is \$12,000.
Step 2: Deduct the bank service charge of \$50 from the cash balance per books, as it has not yet been recorded in the books.
Step 3: Deduct the NSF (Non-Sufficient Funds) check of \$200 from the cash balance per books, as it also has not yet been recorded in the books.
Step 4: Add the deposits in transit of \$2,000 to the cash balance per books, as these are amounts that have been recorded in the books but not yet reflected in the bank statement.
Step 5: Deduct the outstanding checks totaling \$1,500 from the cash balance per books, as these are checks issued by the company that have not yet cleared the bank.
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