The balance in the Colt Company's Cash account on August 31 was $19,700,before the bank reconciliation was prepared.After examining the August bank statement and items included with it,the company's accountant found:
$\begin{array}{lr}
\text { Checks outstanding } & \$ 4,300 \
\text { NSF check } & 140 \
\text { Note collected by bank for the Colt Company } & 1,200 \
\text { Deposits outstanding } & 1,800 \
\text { Bank service fees } & 60
\end{array}$
What is the amount of cash that should be reported in the balance sheet as of August 31?

Question

The balance in the Colt Company's Cash account on August 31 was $19,700,before the bank reconciliation was prepared.After examining the August bank statement and items included with it,the company's accountant found: 
$\begin{array}{lr}
\text { Checks outstanding } & \$ 4,300 \
\text { NSF check } & 140 \
\text { Note collected by bank for the Colt Company } & 1,200 \
\text { Deposits outstanding } & 1,800 \
\text { Bank service fees } & 60
\end{array}$
What is the amount of cash that should be reported in the balance sheet as of August 31?

Quizplus · Accepted Answer

The correct answer is A because the balance in the Cash account on August 31 should be $20,700. This is calculated by adding the deposits outstanding ($1,800) to the balance in the Cash account before the bank reconciliation ($19,700) and subtracting the checks outstanding ($4,300), the NSF check ($140), and the bank service fees ($60).

The Balance in the Colt Company's Cash Account on August