If the month-end bank statement shows a balance of $49,000, outstanding cheques are $16,000, a deposit of $7,000 was in transit at month end, and a cheque for $800 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Question

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Starting balance: $49,000
Outstanding cheques: $16,000
Add: deposit in transit: $7,000
Adjusted balance: $40,000

However, there was an error where a check of $800 was erroneously charged by the bank against the account, so we need to deduct it from our adjusted balance:

Adjusted balance: $40,000 - $800 = $39,200

Therefore, the correct balance in the bank account at month end is $39,200. Choice C is the correct answer.

If the Month-End Bank Statement Shows a Balance of $49,000