Question

Northwest Plumbing's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $50. Northwest Plumbing's book balance shows outstanding checks of $5,288 and deposits in transit of $9,325. The adjusted balance on the bank side of the reconciliation would be:A) 43,217B) 47,304C) 43,267D) 39,230

Answer 1

B) 47,304

Step-by-step explanation:

To adjust the balance on the bank side we look at figures in the cash book that are not adjusted for in the bank statement.

These include,

Outstanding checks of $5,288

Deposits in transit of $9,325

Outstanding checks have not been subtracted from the bank statement and deposits have not been added,

Bank reconciliation = 43,267 + 9,325 - 5,288 = $47,304

In the cash book checks have been paid for payments but the bank has not yet recorded them, that is why we subtract them.

Hope that helps.