A company's cash ledger shows an ending balance of $4600.Reconciling items included a bookkeeper error of $80 (a $550 cheque recorded as $630),two outstanding cheques totalling $810,a service charge of $20,a deposit in transit of $260 and interest revenue of $31.What is the adjusted book balance?

Question

Quizplus · Accepted Answer

Starting with the ending balance of $4600, we can make the following adjustments:

1. Deduct the bookkeeper error of $80 (subtracting $550 and adding $630): 
$4600 - $80 = $4520

2. Deduct the outstanding cheques totaling $810:
$4520 - $810 = $3710

3. Add the deposit in transit of $260: 
$3710 + $260 = $3970

4. Add the interest revenue of $31: 
$3970 + $31 = $4001

5. Deduct the service charge of $20: 
$4001 - $20 = $3981

Therefore, the adjusted book balance is $4691. The correct answer is A).

A Company's Cash Ledger Shows an Ending Balance of $4600