A review of the bank statement and accounting records of the Blake Company revealed the following items: Which of the item(s) would be subtracted from the company's unadjusted book balance to determine the true cash balance?

Question

A review of the bank statement and accounting records of the Blake Company revealed the following items:  Which of the item(s) would be subtracted from the company's unadjusted book balance to determine the true cash balance?

Quizplus · Accepted Answer

The NSF check and the debit memo both reduce Blake's cash balance, but have not yet been recorded, so they should be subtracted from the unadjusted book balance. The outstanding checks and the certified checks were recorded when they were written, so they would not be subtracted again.

A Review of the Bank Statement and Accounting Records of the Blake