Border Company's cash account had a balance of $962 on August 31.This included a bank deposit of $87 that was in transit on the 31st.The August 31 bank statement contained the following information: $$\begin{array} { l r }
\text { Bank Statement Balance } & \$ 1,089 \
\text { NSF check } & 16 \
\text { Bank Service Charge } & 7 \
\text { Collection of notes receivable } & 68
\end{array}$$ Border also had checks outstanding of $169.What is Border's adjusted cash balance at August 31?

Question

Border Company's cash account had a balance of $962 on August 31.This included a bank deposit of $87 that was in transit on the 31st.The August 31 bank statement contained the following information: $$\begin{array} { l r } 
\text { Bank Statement Balance } & \$ 1,089 \
\text { NSF check } & 16 \
\text { Bank Service Charge } & 7 \
\text { Collection of notes receivable } & 68
\end{array}$$ Border also had checks outstanding of $169.What is Border's adjusted cash balance at August 31?

Quizplus · Accepted Answer

The adjusted cash balance is calculated by starting with the bank statement balance, then adding or subtracting any items that have not been accounted for in the bank's records but are in the company's records. Starting with the bank statement balance of $1,089, subtract the outstanding checks ($169), add the deposit in transit ($87), subtract the NSF check ($16), and subtract the bank service charge ($7). The collection of notes receivable ($68) is already included in the bank's balance, so no adjustment is needed for it. This results in an adjusted cash balance of $1,007.

Border Company's Cash Account Had a Balance of $962 on August