The accountant for Lola Corp.was preparing a bank reconciliation as of February 28, 2016.The following items were identified: $\begin{array}{lr}
\text { Lola's book balance } & \$ 35,900 \
\text { Outstanding checks } & 12,050 \
\text { Interest earned on checking accounts } & 75 \
\text { Customer's NSF check returned by the bank } & 325\
\end{array}$ There was an error in recording a customer's check as the check was recorded by Lola as $110, but the correct amount of $101 was recorded by the bank. Lola's adjusted cash balance at February 28, 2016 is

Question

Quizplus · Accepted Answer

To calculate the adjusted cash balance, start with Lola's book balance, add any credits (interest earned), subtract any debits (NSF check, error in recording a customer's check), and adjust for outstanding checks. The calculation is as follows: $35,900 (book balance) + $75 (interest earned) - $325 (NSF check) - $9 (error in recording a customer's check, $110 recorded instead of $101, so subtract the difference) - $12,050 (outstanding checks) = $35,641.

The Accountant for Lola Corp There Was an Error in Recording a Customer's Check as of February