If Wilson reports under U.S. GAAP, its 12/31/2013 balance sheet would show what cash balance?

Question

Quizplus · Accepted Answer

According to the information given, Wilson had a bank overdraft of $10,000 on December 31, 2013. This means that its cash balance was negative at that time. However, under U.S. GAAP, the bank overdraft should be reported as a liability rather than as a negative cash balance. Therefore, the cash balance reported on the balance sheet would be:

Cash balance = $50,000 (actual cash) - $10,000 (overdraft reported as liability) = $60,000.

Thus, the correct answer is C.

If Wilson Reports Under U