Macrinez Company assembled the following information in completing its July bank reconciliation: balance per bank $22,920; outstanding checks $4,650; deposits in transit $7,500; NSF check $480; bank service charge $150; cash balance per books $26,400. As a result of this reconciliation, Macrinez will
A) reduce its cash account by $150.
B) reduce its cash account by $630.
C) reduce its cash account by $2,850.
D) increase its cash account by $330.

Question

Quizplus · Accepted Answer

The adjusted cash balance per books is calculated as follows:

Beginning balance per books = $26,400
Add: Deposits in transit = $7,500
Less: Outstanding checks = $4,650
Less: NSF check = $480
Less: Bank service charge = $150
Adjusted cash balance per books = $28,620

Since the adjusted cash balance per books is higher than the balance per bank, Macrinez's cash account will be reduced by the amount of the difference, which is $630 ($28,620 - $22,920).

Macrinez Company Assembled the Following Information in Completing Its July