The accountant for Fazzi Corp.was preparing a bank reconciliation as of April 30, 2016.The following items were identified: $$\begin{array} { l r }
\text { All an's book balance } & \$ 46,200 \
\text { Outstanding checks } & 1,100 \
\text { Interest earned on checking account } & 50 \
\text { Customer's NSF check returned by the bank } & 500
\end{array}$$ ? In addition, Fazzi made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510.What amount will Fazzi report as its adjusted cash balance at April 30, 2016?

Question

The accountant for Fazzi Corp.was preparing a bank reconciliation as of April 30, 2016.The following items were identified: $$\begin{array} { l r } 
\text { All an's book balance } & \$ 46,200 \
\text { Outstanding checks } & 1,100 \
\text { Interest earned on checking account } & 50 \
\text { Customer's NSF check returned by the bank } & 500
\end{array}$$ ? In addition, Fazzi made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510.What amount will Fazzi report as its adjusted cash balance at April 30, 2016?

Quizplus · Accepted Answer

The adjusted cash balance is calculated as follows: Start with the book balance of $46,200. Add interest earned on checking account ($50), subtract the customer's NSF check ($500), and correct the error in recording the customer's check (add the difference of $360, since $510 - $150 = $360). Outstanding checks do not affect the book balance but are used to reconcile the bank statement balance. Therefore, the adjusted cash balance is $46,200 + $50 - $500 + $360 = $46,110.

The Accountant for Fazzi Corp ? in Addition, Fazzi Made an Error in Recording a of April