Answered: A company's bank statement shows $715…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 5E

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Question

A company's bank statement shows $715 direct debits and $353 investment income not recorded in the
cash book. The bank statement does not show a customer's cheque for $875 entered in the cash book
on the last day of the accounting period. If the cash book shows a credit balance of $610, what balance
appears on the bank statement?

$1.847 debit
$1.847 credit
$972 credit
$972 debit
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Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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