Nolan Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Nolan Company issued checks totaling $38,900. The July bank statement shows that $24,300 in checks cleared the bank in July. A check from one of Nolan Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Nolan Company's July bank reconciliation should be
A) $14,600.
B) $20,000.
C) $19,700.
D) $9,200.

Question

Quizplus · Accepted Answer

The outstanding checks at the end of July are calculated as follows: Start with the outstanding checks from June ($5,400), add the checks issued in July ($38,900), and subtract the checks that cleared in July ($24,300). This results in $5,400 + $38,900 - $24,300 = $20,000. The NSF check does not affect the calculation of outstanding checks.

Nolan Company Had Checks Outstanding Totaling $5,400 on Its June