The May Bank Statement for Consulting Services Shows a Balance

question 54

Multiple Choice

The May bank statement for Consulting Services shows a balance of $7,200, but the balance per books shows a cash balance of $9,100. Other information includes: 1. A check for $170 to pay the electric bill was recorded on the books as $20.
2) Included on the bank statement was a note collected by the bank for $450 plus interest of $30.
3) Checks outstanding totaled $290.
4) Bank service charges were $60.
5) Deposits in transit were $2,460.
Which item should be added to the company's book balance during the bank reconciliation?

• A) Deposit in transit
• B) Outstanding check
• C) Bank service charge
• D) Note collected by the bank

---

Definitions:

Breach Of Condition

A violation of a specific condition in a contract that justifies the non-breaching party to terminate the contract and seek compensation.

Implied Repudiation

A situation where one party’s actions or inactions signal a refusal to fulfill their contractual obligations, suggesting an intention to breach the contract despite no explicit declaration.

Express Repudiation

The clear and unequivocal refusal to honor a contract or agreement, effectively declaring one's intention not to perform their contractual obligations.

Quantum Meruit

A legal principle allowing a party to recover costs for services provided when no contract exists, based on the reasonable value of the work.