The treasurer for Rahm Corp.was preparing a bank reconciliation as of September 30, 2016.The following items were identified: $$\begin{array} { l r }
\text { Rahm's book balance } & \$ 32,800 \
\text { Deposits in transit } & 4,300 \
\text { Outstanding checks } & 2,200 \
\text { Interest earned on checking account } & 100 \
\text { Customer's NSF check returned by the bank } & 400
\end{array}$$ ? Rahm Corp.'s adjusted cash balance at September 30, 2016 is

Question

The treasurer for Rahm Corp.was preparing a bank reconciliation as of September 30, 2016.The following items were identified: $$\begin{array} { l r } 
\text { Rahm's book balance } & \$ 32,800 \
\text { Deposits in transit } & 4,300 \
\text { Outstanding checks } & 2,200 \
\text { Interest earned on checking account } & 100 \
\text { Customer's NSF check returned by the bank } & 400
\end{array}$$ ? Rahm Corp.'s adjusted cash balance at September 30, 2016 is

Quizplus · Accepted Answer

The adjusted cash balance is calculated as follows: Start with the book balance of $32,800, add the interest earned of $100, and subtract the NSF check of $400. The deposits in transit and outstanding checks are used to reconcile the bank statement, not the book balance. Thus, the adjusted cash balance is $32,800 + $100 - $400 = $32,500.

The Treasurer for Rahm Corp ? Rahm Corp