To reconcile the balance per book to the balance per bank will require adjusting the book balance by: $661 $727 $733 $648

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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You are performing a bank reconciliation for August 20X1. The balance per bank is $21,863; the ledger Cash balance, $17,250. Outstanding checks are as follows:

             Check Number             Amount

                    2003                           $   560

                    2004                                910

                    2008                             1,700

                    2009                             2,110

You have also identified the following:

  • A $13 bank service charge for August
  • An NSF check for $720
  • Check #1996, made out to Local Gas & Electric for $798, was booked as $870
  • A $6 charge for your bank’s Web Banking, which the company does not use

To reconcile the balance per book to the balance per bank will require adjusting the book balance by:

  1. $661
  2. $727
  3. $733
  4. $648
Expert Solution
Step 1

Bank Reconciliation is the process of reconciling the errors due to which the book balance of cash and Cash per bank balance are not equal. It is about identifying the error and make correct reconciliation either in bank balance or in cash book. 

If reconciliation is to be done  balance per book then we must ignore the total outstanding checks of $5,280 ($560 +$910+ $1,700 + $2,110) and Web Banking service fee of $6 because they are the adjustments to to the bank balance. and not to the book balance. 

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