The Following Information Is Needed to Reconcile the Cash Balance

question 32

Multiple Choice

The following information is needed to reconcile the cash balance for Gourmet Catering Services.
• A deposit of $5,600 is in transit.
• Outstanding checks total $1,000.
• The book balance is $6,400 at February 28, 2019.
• The bookkeeper recorded a $1,800 check as $17,200 in payment of the current month's rent.
• The bank balance at February 28, 2019 was $17,410.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,300 was returned for nonsufficient funds.
• The bank service charge is $90.
What was the adjusted book balance?

• A) $18,500
• B) $18,410
• C) $18,590
• D) $17,500

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Definitions:

Cost Method

An accounting technique where investments are recorded at their original purchase cost, without adjustment for market changes unless deemed permanently impaired.

Non-controlling Interest

The portion of equity in a subsidiary not owned by the parent company, showing the equity interest in a subsidiary held by minority shareholders.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Deferred Taxes

are taxes that are accumulated due to temporary differences between the accounting income and taxable income, and will be paid or received in the future.