While Preparing the February 28th Bank Reconciliation for the Checking

question 26

Multiple Choice

While preparing the February 28th bank reconciliation for the checking account for Willow, Inc., the accountant identified the following items: In addition, Willow made an error in recording a customer's check; the amount was recorded in cash receipts as $150, while the bank correctly recorded the amount as $510. What amount will Willow report as its actual cash balance on February 28th?

• A) $44,650
• B) $45,890
• C) $46,110
• D) $46,250

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Definitions:

Reasonably Possible

A term used in accounting and law to indicate that a future event or condition has a chance of occurring.

Liability

A company's financial debt or obligations that arise during the course of its business operations.

Probable Loss

An estimated loss from a contingent liability that is likely to occur and can be reasonably estimated.

Reasonably Possible

Describes a level of likelihood that something might occur, under consideration in areas like assessments of contingent liabilities.