Question

The bank reconciliation of xyz co. is provided below. demonstrate the entries needed to update the cash account in the general ledger by selecting the correct answers below. bank statement balance $2,010 book balance $2,200 add: deposit in transit 600 add: note receivable collected by bank 100 less: outstanding checks 370 less: bank service charges 60

a. debit cash $100 and credit note receivable $100
b. debit note receivable $100 and credit cash $100
c. debit cash $600 and credit revenues $600
d. debit miscellaneous expense $370 and credit cash $370
e. debit bank service charge expense $60 and credit cash $60.

Answer 1

To update the cash account in the general ledger, you need to add the deposit in transit and the note receivable collected by the bank, and subtract the outstanding checks and bank service charges.

Step-by-step explanation:

To update the cash account in the general ledger, we need to make the necessary entries based on the bank reconciliation provided. Let's go through each item:

1. Add the deposit in transit of $600 to the book balance. This would increase the cash account by $600.
2. Add the note receivable collected by the bank of $100 to the book balance. This would increase the cash account by $100.
3. Subtract the outstanding checks of $370 from the book balance. This would decrease the cash account by $370.
4. Subtract the bank service charges of $60 from the book balance. This would decrease the cash account by $60.

After these entries, the updated cash account balance in the general ledger would be:

Book Balance: $2,200
Deposit in Transit: +$600
Note Receivable Collected by Bank: +$100
Outstanding Checks: -$370
Bank Service Charges: -$60

The updated cash account balance would be: $2,570.