Question

Urban Bloom, Inc.'s books show an ending cash balance of $18,000 before preparing the bank reconciliation. Given the bank reconciliation shows outstanding checks of $5,400, deposits in transit of $3,600, NSF check of $180, and interest earned on the bank account of $18, the company's up-to-date ending cash balance equals:

A) $12,438.
B) $17,838.
C) $16,038.
D) $18,198.

Answer 1

B) $17,838.

Step-by-step explanation:

cash balance $18,000

- NSF check ($180)

+ interest earned $18

reconciled cash balance $17,838

Outstanding checks ($5,400) and deposits in transit ($3,600) are used to reconcile bank statements, not the company's cash or book balance.