Question

If the month-end bank statement shows a balance of $36,000, outstanding checks are $10,000 , a deposit of $4,000 was in transit at month end, and a check for $600 was erroneously charged by the bank against the account, the correct balance in bank account at month end is :
a) $29,400
b) $30,000
c) $30,600
d) $41,400

Answer 1

Answer:

The correct answer is C

Explanation:

The amount of correct balance which is shown in the bank account at the month end is:

= Month end balance - Outstanding balance + Deposit in transit at month end + Check which was erroneously charged by bank

= $36,000 - $10,000 + $4,000 + $600

= $26,000 + $4,600

= $30,600

Therefore, the month end balance amounts to $30,600 in the bank account.