Rich Company's unadjusted book balance at October 31, 2014 is $2,550. The following information is available for the bank reconciliation.
Outstanding checks, $600
Deposits in transit, $450
Bank service charges, $90
Bank collected an accounts receivable for Rich Company, $1,000
NSF check written by one of Rich's customers, $600.
Based on this information Rich's true cash balance is:

Question

Quizplus · Accepted Answer

Starting with the unadjusted book balance of $2,550:
- Deduct the outstanding checks of $600: $2,550 - $600 = $1,950
- Add deposits in transit of $450: $1,950 + $450 = $2,400
- Deduct the bank service charges of $90: $2,400 - $90 = $2,310
- Add the bank collected accounts receivable of $1,000: $2,310 + $1,000 = $3,310
- Deduct the NSF check of $600: $3,310 - $600 = $2,710
Therefore, Rich's true cash balance is $2,710, which is closest to option D ($2,860).

Rich Company's Unadjusted Book Balance at October 31, 2014 Is