Bertram Company assembled the following information in completing its May bank reconciliation: balance per bank ₤7,820 outstanding checks ₤1,775; deposits in transit ₤1,250; NSF check ₤680; bank service charge ₤25; cash balance per books ₤8,000.As a result of this reconciliation, Bertram will

Question

Quizplus · Accepted Answer

Bertram must deduct the outstanding checks (₤1,775) and the NSF check (₤680) from the bank balance (₤7,820) to determine the adjusted balance per bank (₤5,365). Then, they must add the deposits in transit (₤1,250) to that balance to arrive at the true balance (₤6,615). This adjusted balance should match the cash balance per books (₤8,000). The difference between the adjusted balance per bank and the cash balance per books is the amount of checks that have cleared but haven't been recorded by Bertram yet, which is ₤1,385. Since the company's cash balance per books (₤8,000) is higher than the adjusted balance per bank (₤6,615), we know that Bertram has recorded more cash receipts than the bank has processed. To reconcile the two balances, Bertram must reduce its cash account by the excess amount, which is ₤705. Therefore, option B is correct.

Bertram Company Assembled the Following Information in Completing Its May