Question

Neumann, Inc.'s books show an ending cash balance of $20,000 before preparing the bank reconciliation. Given that the bank reconciliation shows outstanding checks of $2,000; deposits outstanding of $3,000; NSF check of $200; and interest earned on the bank account of $30, the company's up-to-date ending cash balance equals:________________.

Answer 1

Updated ending cash balance is $ 19,830

Step-by-step explanation:

Balance as per cash book $ 20,000

Less: NSF Cheques $( 200)

Add: Interest earned $ 30

Adjusted cash balance $ 19,830

Outstanding cheques represent checks issued but not presented so these are already recorded in the cash book at the time of issuance.

Similarly, the deposits outstanding have been recorded when collected,

The above two items are used to adjust the bank statement balance in a bank reconciliation.