The following data was identified by Raines Corp.in preparation of its bank reconciliation on October 31,2017:
$$\begin{array} { l r }
\text { Bank statement balance } & \$ 30,700 \
\text { Raines' book bal ance (before adjustments) } & ? \
\text { Outstanding checks } & 4,200 \
\text { NSF checks } & 400 \
\text { Service charge } & 300 \
\text { Deposits in transit } & 3,100 \
\text { Interest earned on checking account } & 100
\end{array}$$
- What is the net amount of the increase or decrease in Raines' cash balance which must be recorded as a result of the adjustments identified by the bank reconciliation?
A)$100 decrease
B)$300 decrease
C)$400 decrease
D)$600 decrease

Question

The following data was identified by Raines Corp.in preparation of its bank reconciliation on October 31,2017: 
$$\begin{array} { l r } 
\text { Bank statement balance } & \$ 30,700 \
\text { Raines' book bal ance (before adjustments) } & ? \
\text { Outstanding checks } & 4,200 \
\text { NSF checks } & 400 \
\text { Service charge } & 300 \
\text { Deposits in transit } & 3,100 \
\text { Interest earned on checking account } & 100
\end{array}$$ 
- What is the net amount of the increase or decrease in Raines' cash balance which must be recorded as a result of the adjustments identified by the bank reconciliation?
A)$100 decrease
B)$300 decrease
C)$400 decrease
D)$600 decrease

Quizplus · Accepted Answer

The adjustments identified in the bank reconciliation show that there are outstanding checks of $300 and a bank service charge of $30 deducted from the company's account. This results in a net decrease of $330 in Raines' cash balance. Additionally, a deposit in transit of $270 was identified, which increases the cash balance. Therefore, the net amount of the increase or decrease in Raines' cash balance is a decrease of $600 ($330 subtracted from $270). The correct answer is D.

The Following Data Was Identified by Raines Corp - What Is the Net Amount of the Increase or Its