hapter 7: Bank reconciliation –Cuddly Company is preparing the monthly bank reco
ID: 2551840 • Letter: H
Question
hapter 7:
Bank reconciliation –Cuddly Company is preparing the monthly bank reconciliation. The following information is available:
Balance Per Bank
Balance Per Books (Cuddly Company’s cash balance in the ledger)
Outstanding Checks
Deposits in Transit
NSF Checks
Bank Service Charge
Interest Earned
Electronic Funds Transfer Received
What is the effect of this information on the company’s cash balance? (A)Increase or Decrease? (B) By what amount? (HINT: You only have to consider what affects the balance per books! You can ignore anything that affects the balance per bank.)
Balance Per Bank
16,422Balance Per Books (Cuddly Company’s cash balance in the ledger)
17,704Outstanding Checks
2,383Deposits in Transit
4,750NSF Checks
425Bank Service Charge
55Interest Earned
35Electronic Funds Transfer Received
1,530Explanation / Answer
Company’s cash balance = 35+1530-55-425= $1085 increase Increase by $1085
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