Soft Water Company gathered the following reconciling information in preparing its July bank reconciliation: $\begin{array}{lr}
\text { Cash balance per books, } 7 / 31 & \$ 23,500 \
\text { Deposits in transit } & 1,200 \
\text { Notes receivable and interest collected by bank } & 4,800 \
\text { Bank charge for check printing } & 80 \
\text { Outstanding checks } & 8,000 \
\text { NSF check } & 860
\end{array}$ The adjusted cash balance per books on July 31 is
A) $19360.
B) $20560.
C) $27360.
D) $28560.

Question

Quizplus · Accepted Answer

The adjusted cash balance per books on July 31 is calculated by starting with the cash balance per books, then adding any items that increase the balance and subtracting any items that decrease the balance. Here, add the notes receivable and interest collected by the bank ($4,800) and subtract the bank charge for check printing ($80) and the NSF check ($860), resulting in $23,500 + $4,800 - $80 - $860 = $27,360. Deposits in transit and outstanding checks are not adjusted on the books; they are reconciling items for the bank balance.

Soft Water Company Gathered the Following Reconciling Information in Preparing