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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1) The following information was taken from a company's bank reconciliation at the end of the year:

Bank balance. $8000

Checks outstanding $5800

Note collected by the bank $1500

Service fee $20

Deposits outstanding $4000

NSF check $300

What is the correct cash balance that should be reported in the company's balance sheet at the end of the year?

A) $6.200

B) $10,200

C) $6.160

D) $7,400

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

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Ideally cash balance as per cashbook and bank balance as per bank statement must reconcile with each other. In case, there is any difference, then bank reconciliation statement must be prepared to reconcile both the balances.

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