At the end of the accounting year, December 31, 2004, a company had a petty cash fund balance of $600, a chequing account balance of $34,000 in Bank A, an overdraft of $800 with Bank B, and $4,000 in customer payments in the form of money orders. Assuming no other differences between the company books and the bank balances, what cash amount should the company report on its 2004 balance sheet?

Question

Quizplus · Accepted Answer

The cash amount should include the petty cash fund, the chequing account balance, and the customer payments, but subtract the overdraft. Thus, $600 (petty cash) + $34,000 (Bank A) + $4,000 (money orders) - $800 (overdraft) = $37,800.

At the End of the Accounting Year, December 31, 2004