Consider the following facts for Company A: Cash account balance per the general

Question

Consider the following facts for Company A: Cash account balance per the general ledger at May 31 = $13,287. Cash account balance per the bank statement at May 31 = $14,157. The bank statement included a debit memo of $35 for check printing charges. Cash sales of $1,720 on May 12 were deposited in the bank. The deposit was incorrectly recorded in Company A books for $1,820. The bank credited the cash account for the correct amount. At May 31, outstanding checks totaled $1,225. At May 31, deposits in transit totaled $2,100. On May 18, Company A issued check #1181 for $191 to Company B for payment on account. The check cleared the bank in May, but was incorrectly recorded by Company A on its books for $119. A $4,000 not receivable was collected by the bank for Company A on May 31 plus interest of $80. The bank charged a collection fee of $20. No interest had been accrued by Company A for the note. In the cancelled checks received with the bank statement, there was check for $800 issued by another company and incorrectly charged to Company A by the bank. On May 31, the bank statement showed an NSF charge of $1,308 for a check issued by a customer to Company A as payment on account. With respect to Company A's bank reconciliation adjusting entries at May 31, which of the following statements is true The total debits to Notes Receivable account should be $4,000 The total credits to the Cash account should be equal to $2,545 None of these answers are correct. The total debits to the Cash account should equal $4,060. The total credits to the Accounts Receivable account should be $1,308

Explanation / Answer

the total credit to the accounts receivable account should be $1308

Cash balance per bank statement

Balance as per books

Balacne $14,157 + deposits in transit 2,100 + bank error    800 - o/s checks (1225) Balance $15,832

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