Assume the following facts for Kurt Company: The month-end bank statement shows a balance of $40,000; outstanding checks total $2,000; a deposit of $8,000 is in transit at month-end; and a check for $400 was erroneously charged against the account by the bank. What is the correct cash balance at the end of the month?

Question

Quizplus · Accepted Answer

The correct cash balance is calculated by adjusting the bank statement balance for outstanding checks, deposits in transit, and errors. Start with the bank statement balance of $40,000, add the deposit in transit of $8,000, subtract the outstanding checks of $2,000, and add back the $400 error. This results in a correct cash balance of $46,400.

Assume the Following Facts for Kurt Company: the Month-End Bank