In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:
$\begin{array} { | l | l | }
\hline \text { Cash balance per company books on January 30 } & \$ 4,725 \
\hline \text { Deposits in transit at month-end } & { \$ 1,800 } \
\hline \text { Outstanding checks at month-end } & \$ 520 \
\hline \text { Bank service charges } & \$ 25 \
\hline \text { EFT automatically deducted monthly, not yet recorded by Maxi } & \$ 380 \
\hline \text { An NSF check returned on a customer account } & \$ 265\
\hline \
\hline \text { An NSF check returned on a customer account } & \$ 265\
\hline
\end{array}$
A) $4,055
B) $4,585
C) $5,335
D) $4,815
E) $5,855

Question

In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:
$\begin{array} { | l | l | } 
\hline \text { Cash balance per company books on January 30 } & \$ 4,725 \
\hline \text { Deposits in transit at month-end } &  { \$ 1,800 } \
\hline \text { Outstanding checks at month-end } & \$ 520 \
\hline \text { Bank service charges } & \$ 25 \
\hline \text { EFT automatically deducted monthly, not yet recorded by Maxi } & \$ 380 \
\hline \text { An NSF check returned on a customer account } &  \$ 265\
\hline \
\hline \text { An NSF check returned on a customer account } &  \$ 265\
\hline
\end{array}$
A) $4,055	
B) $4,585	
C) $5,335
D) $4,815	
E) $5,855

Quizplus · Accepted Answer

The correct cash balance after adjustments is $4,055. Starting with the book balance of $4,725, subtract the bank service charges ($25), the EFT ($380), and the NSF check ($265). The deposits in transit and outstanding checks do not affect the book balance.

In the Process of Reconciling Its Bank Statement for January