The Following Data Was Identified by Raines Corp - What Is the Net Amount of the Increase or Its

question 118

Multiple Choice

The following data was identified by Raines Corp.in preparation of its bank reconciliation on October 31,2017:
$$\begin{array} { l r } \text { Bank statement balance } & \$ 30,700 \\\text { Raines' book bal ance (before adjustments) } & ? \\\text { Outstanding checks } & 4,200 \\\text { NSF checks } & 400 \\\text { Service charge } & 300 \\\text { Deposits in transit } & 3,100 \\\text { Interest earned on checking account } & 100\end{array}$$
- What is the net amount of the increase or decrease in Raines' cash balance which must be recorded as a result of the adjustments identified by the bank reconciliation?

• A)$100 decrease
• B)$300 decrease
• C)$400 decrease
• D)$600 decrease

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Definitions:

Deposits in Transit

Deposits in transit refer to funds that have been received and recorded by a business but not yet reflected in the bank's records.

Service Charges

Fees charged for providing a particular service, often seen in banking and accommodations.

Current Assets

Resources anticipated to be turned into cash, disposed of, or used up either within one year or over the length of the business's operational cycle, depending on which period is greater.

Net Sales

Revenue from the sale of goods or services after deducting returns, allowances, and discounts.