Assume the following facts for Lowmann Company: The month-end bank statement shows a balance of $40,000;outstanding checks total $2,000;a deposit of $8,000 is in transit at month-end;and a check for $400 was erroneously charged against the account by the bank.What is the correct cash balance at the end of the month?

Question

Quizplus · Accepted Answer

The correct cash balance is calculated by starting with the bank statement balance, adding the deposit in transit, subtracting outstanding checks, and adding back any errors made by the bank. Therefore, $40,000 + $8,000 - $2,000 + $400 = $46,400.

Assume the Following Facts for Lowmann Company: the Month-End Bank