DigDug Corporation had outstanding cheques totalling $5,400 on its June bank reconciliation.In July,DigDug issued cheques totalling $38,900.The July bank statement shows that $26,300 in cheques cleared the bank in July.The amount of outstanding cheques on DigDug's July bank reconciliation should be:
A)$12,600.
B)$18,000.
C)$5,400.
D)$7,200.

Question

Quizplus · Accepted Answer

To determine the outstanding cheques on DigDug's July bank reconciliation, we need to use the following formula:

Outstanding cheques = Previous outstanding cheques + Cheques issued - Cheques cleared

Previous outstanding cheques for June = $5,400

Cheques issued in July = $38,900

Cheques cleared in July = $26,300

Outstanding cheques = $5,400 + $38,900 - $26,300 = $18,000

Therefore, the correct answer is B) $18,000.

DigDug Corporation Had Outstanding Cheques Totalling $5,400 on Its June