In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information:
|Cash balance per company books on April||$6,185|
|Deposits in transit at month-end||$1,480|
|Outstanding checks at month-end||$800|
|Bank charge for printing new checks||$135|
|Note receivable and interest collected by bank on Donahue's behalf||$590|
|A check paid to Donahue during the month by a customer is returned by the bank as NSF||$660|
The adjusted cash balance per the books on April 30 is:
The process of bank reconciliation is used to equalise the cash shown on the company's books and the cash shown on the bank statement. Debit and credit memoranda, deposits in transit, unpaid checks, and other errors fall under this category.
Answer and Explanation: 1
The correct answer is option(b).
Computation of adjusted book balance:
|Add: Note collection & interest...|
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fromChapter 5 / Lesson 7
Discover the bank reconciliation definition and the purpose of bank reconciliation. Learn how professionals prepare a bank reconciliation statement, with examples.