The accountant preparing the January bank reconciliation identified the following items: $\begin{array}{l}
\text { Cash balance per company records } &\$ 35,900 \
\text { Outstanding checks } &12,050 \
\text { Interest earned on the checking account } &75 \
\text { Customer's NSF check returned by the bank } &325
\end{array}$ There was also an error in the accounting records whereby a customer's check for $101 was recorded as $110.What is the company's adjusted cash balance at January 31st?

Question

The accountant preparing the January bank reconciliation identified the following items: $\begin{array}{l}
 \text { Cash balance per company records } &\$ 35,900 \
 \text { Outstanding checks } &12,050 \
 \text { Interest earned on the checking account } &75 \
 \text {  Customer's NSF check returned by the bank } &325
\end{array}$ There was also an error in the accounting records whereby a customer's check for $101 was recorded as $110.What is the company's adjusted cash balance at January 31st?

Quizplus · Accepted Answer

The adjusted cash balance is $35,641. This is calculated by adding the cash balance per company records ($35,900) to the interest earned on the checking account ($75) and subtracting the outstanding checks ($12,050) and the customer's NSF check returned by the bank ($325). The error in the accounting records whereby a customer's check for $101 was recorded as $110 does not affect the cash balance.

The Accountant Preparing the January Bank Reconciliation Identified the Following