The following information was taken from the bank reconciliation for Mooner Sooner Inc.at the end of 2012: Bank balance: $8,000
Checks outstanding: $5,800
Note collected by the bank: $1,500
Service fee: $20
Deposits outstanding: $4,000
NSF check (bad check)returned for $300
What is the correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of 2012?

Question

Quizplus · Accepted Answer

The correct cash balance is calculated by adjusting the bank balance for outstanding checks and deposits. Start with the bank balance of $8,000, subtract the outstanding checks of $5,800, and add the outstanding deposits of $4,000. The note collected, service fee, and NSF check are adjustments to the book balance, not the bank balance. Thus, the correct cash balance is $6,200.

The Following Information Was Taken from the Bank Reconciliation for Mooner