Mendez Company Assembled the Following Information in Completing Its July

question 207

Multiple Choice

Mendez Company assembled the following information in completing its July bank reconciliation: balance per bank $22920; outstanding checks $5640; deposits in transit $7300; NSF check $420; bank service charge $95; cash balance per books $26400. As a result of this reconciliation Mendez will

• A) reduce its cash account by $95.
• B) reduce its cash account by $515.
• C) reduce its cash account by $1660.
• D) increase its cash account by $325.

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Definitions:

Owner's Equity

The owner's residual interest in the assets of the business after deducting liabilities, representing ownership value in a company.

Owner's Equity

The residual interest in the assets of the enterprise after deducting its liabilities, also known as shareholder's equity.

Net Income

The final amount of money a company makes after taking away all expenses, including taxes and the costs of operation, from the total income.

Owner Drawings

Amounts withdrawn by the owner of a business for personal use, reducing the owner's equity in the business.