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The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from a customer. The company had outstanding checks of $100 and a deposit in transit of $300.

-Assuming that the unadjusted bank balance was $500,what is the unadjusted book balance?
A)$745
B)$455
C)$700
D)$800

Question

[The following information applies to the questions displayed below.]

The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from a customer. The company had outstanding checks of $100 and a deposit in transit of $300.

-Assuming that the unadjusted bank balance was $500,what is the unadjusted book balance?
A)$745
B)$455
C)$700
D)$800

Quizplus · Accepted Answer

True cash balance = Unadjusted bank balance of $500 + Deposits in transit of $300 - Outstanding checks of $100 = $700
True cash balance of $700 (calculated above)= Unadjusted book balance (the unknown)- Service charge of $10 + Interest earned of $15 - NSF check of $50
Unadjusted book balance = $700 + $10 - $15 + $50 = $745

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