At March 31, Bandstra Co. had a book balance in its cash account of $5,500. At the end of March the company determined that it had outstanding checks of $900, deposits in transit of $600, a bank service charge of $20, and an NSF check from a customer for $280. The true cash balance at March 31 is:

Question

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The true cash balance is $5,200. This is calculated by taking the book balance of $5,500 and subtracting the outstanding checks of $900, adding the deposits in transit of $600, and subtracting the bank service charge of $20 and the NSF check of $280.