Question

The cash accoutn shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit or $2,500 made on the last day of the month. The bank statement shows a collection by the bank of $1,200 anda customer's check for $320 was returned because is was NSF. A customer's check was for $450 was recorded on the books as $540 , and a check written for $69 was recorded as $96. The correct balance in the cash account was :

a) $45, 790
b) $45, 817
c) $46, 200
d) $48,317

Answer 1

After adjusting for the deposit not recorded, collection by the bank, NSF check, and errors in recording checks, the correct balance in the cash account is $48,317.

Step-by-step explanation:

To determine the correct balance in the cash account, we need to make several adjustments to the initial balance of $45,000.

• The deposit of $2,500, which is not reflected in the bank statement, should be added to the balance.
• The collection by the bank of $1,200 is in our favor and should also be added.
• A customer's check for $320 was returned NSF (non-sufficient funds), so this amount should be subtracted.
• A customer's check was incorrectly recorded as $540 instead of $450. We need to subtract $90 to correct this error.
• A check written for $69 but recorded as $96 means we need to add back the difference of $27 to our account.

Now let's calculate: $45,000 + $2,500 + $1,200 - $320 - $90 + $27 = $48,317.

Therefore, the correct balance in the cash account is $48,317, which corresponds to option d.