The Cash account in the ledger of Clear Windows shows a balance of $12,596 at September 30. The bank statement, however, shows a balance of $16,253 at the same date. The only reconciling items consist of a bank service charge of $16, a large number of outstanding checks totaling $6,740, and a deposit in transit.
-Refer to the above data. What is the adjusted cash balance in the September 30 bank reconciliation?

Question

Quizplus · Accepted Answer

The adjusted cash balance can be calculated by adding the balance per bank statement ($23,458) and subtracting outstanding checks ($7,565) and adding deposits in transit ($2,577). 
Adjusted Cash Balance = $23,458 - $7,565 + $2,577 = $18,470. 
However, there is also a bank error of $5,890, which needs to be deducted from the adjusted cash balance. 
Adjusted Cash Balance = $18,470 - $5,890 = $12,580. 
Therefore, the correct answer is B.

The Cash Account in the Ledger of Clear Windows Shows