The cash records and the bank statement of Frankel Company showed the following at the end of February 2016: Outstanding checks as of the beginning of February 2016, $8,000; checks written by Frankel Company according to its books during February 2016, $50,000; and checks cleared by the bank during February 2016, $54,000. What was the amount of the outstanding checks at the end of February 2016?

Question

Quizplus · Accepted Answer

The outstanding checks at the end of February 2016 can be calculated using the following formula:

Outstanding checks = Outstanding checks at the beginning of the period + Total checks written - Total checks cleared

Outstanding checks = $8,000 + $50,000 - $54,000 = $4,000

Therefore, the amount of outstanding checks at the end of February 2016 was $4,000, which is option B.

The Cash Records and the Bank Statement of Frankel Company