The cash account shows a balance of $40,000 before reconciliation. The bank statement does not include a deposit of $9,200 made on the last day of the month. The bank statement shows a collection by the bank of $3,960 and a customer's check for $1,300 was returned because it was NSF. A customer's check for $1,380 was recorded on the books as $1,920, and a check written for $318 was recorded as $390. The correct balance in the cash account was

Question

Quizplus · Accepted Answer

Starting balance: $40,000
Deposit not on bank statement: +$9,200
Bank collection: +$3,960
Returned check: -$1,300
Recording error (check received): +$540 [($1,920 - $1,380)]
Recording error (check written): -$72 [($318 - $390)]
Adjusted balance: $42,328
Therefore, the correct balance in the cash account is $42,192 (after deducting any outstanding checks and adding any deposits in transit that were made on or before the bank statement date).

The Cash Account Shows a Balance of $40,000 Before Reconciliation