Accounting


Accounting Forum

AccountingCoach.com is the world's largest free online accounting course.


Not signed in (Sign In)

Categories

Vanilla 1.1.7 is a product of Lussumo. More Information: Documentation, Community Support.

Welcome Guest!
Want to take part in these discussions? If you have an account, sign in now.
If you don't have an account, apply for one now.
  1.  
    Finished 20 problems but stuck on these 3.

    1. Osborn Company's unadjusted book balance at June 30, 2009 is $7,800. The company's bank statement reveals bank service charges of $45. Two credit memos are included in the bank statement: one for $900, which represents a collection that the bank made for Osborn, and one for $50, which represents the amount of interest that Osborn had earned on its interest-bearing account in June. Based on this information, Osborn's true cash balance is:
    a. $7,800.
    b. $8,705.
    c. $8,650.
    d. $8,795.

    2. Dent Company's unadjusted bank balance at March 31, 2009 per bank statement is $3,000. The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400. Based on this information, Dent's true cash balance is:
    a. $3,100.
    b. $2,700.
    c. $2,800.
    d. $2,900.

    3. Rich Company's unadjusted book balance at October 31, 2009 is $2,500. The following information is available for the bank reconciliation:
    Outstanding checks, $600
    Deposits in transit, $450
    Bank service charges, $90
    The bank had collected an account receivable for Rich Company, $1,000
    The bank statement included an NSF check written by one of Rich’s customers for $600.

    Based on this information Rich’s true cash balance is:
    a. $1,050.
    b. $3,590.
    c. $2,810.
    d. $2,860.
    • CommentAuthorCounter
    • CommentTimeNov 6th 2009
     
    AccountingCoach.com illustrates how to solve these in its Explanation of Bank Reconciliation. The website is free.
    • CommentAuthorcoorg
    • CommentTimeNov 12th 2009
     
    1) Ans: B (7,800 - 45 + 900 + 50 = 8,705)
    2) Ans: A (3,000 + 500 - 400 = 3,100)

    3) This looks pretty tricky! I dont get the right answer. If anyone knows plz reply. Thx
    • CommentAuthorlball1
    • CommentTimeNov 15th 2009
     
    To figure out #3, you need to decide what transactions will affect your book balance of 2,500. The outstanding checks and deposits in transit are not relevant because you already have them accounted for in your balance of 2,500. The transactions that affect your book balance are the bank service charge (subtract from your books), the money that the bank collected on your behalf (add to your book balance) and the NSF check from one of your customers that is being reversed from your deposits (subtracted from your book balance) I get a total of $2,810.



 

Why AccountingCoach.com?

the accounting coach

AccountingCoach.com is designed to help people without an accounting background easily understand accounting concepts at no cost.


By investing thousands of hours, we have created clear and concise accounting information for both business people and students of all ages.


We understand how difficult accounting can be. That's why we have ensured that each accounting topic includes a clear explanation, reinforcing drills, Q&A, puzzles, dictionary of terms, etc.


Read 1,440 Visitor Testimonials



What's on AccountingCoach.com?