Julian Company Had Cheques Outstanding Totalling $6,400 on Its May

question 125

Multiple Choice

Julian Company had cheques outstanding totalling $6,400 on its May 31 bank reconciliation. In June, Julian Company issued cheques totalling $38,900. The June bank statement shows that $26,300 in cheques cleared the bank in June. A cheque from one of Julian Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding cheques on Julian Company's June 30 bank reconciliation should be

• A) $12,600.
• B) $19,000.
• C) $17,700.
• D) $7,200.

---

Definitions:

Working Stock

Working stock refers to the inventory that is readily available for use or sale, excluding any safety stock kept in reserve to cover potential shortages.

Collection Period

The average number of days it takes for a company to collect payments owed by its customers.

Bad Debts

Money owed to a company that is unlikely to be paid by the debtor, often resulting in a write-off for the company.

Just-In-Time

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.