Goldilocks is the bookkeeper for Three Bears Company.She prepared the company's bank reconciliation at the end of the year and found only two reconciling items: deposits in transit of $2,850 and outstanding checks of $3,500.She then made an adjusting entry to decrease the company's cash balance for the deposits in transit and increase the company's cash balance for the outstanding checks.Now the company's cash balance is exactly the same as the bank statement balance.As a result of the adjusting entry,the cash shown on Three Bears Company's year-end balance sheet will be ________.

Question

Quizplus · Accepted Answer

BGoldilocks incorrectly adjusted the company's cash balance for both deposits in transit and outstanding checks. Deposits in transit should increase the company's cash balance, and outstanding checks should decrease it. However, she did the opposite, leading to an incorrect cash balance on the balance sheet.

Goldilocks Is the Bookkeeper for Three Bears Company