[Anonymous]

In preparing its August 31, 1990 bank reconciliation, Apex Corp. has the following information available:

Balance per bank statement, 8/31/90 $18,050

Deposit in transit, 8/31/90 3,250

Return of customer’s check for insufficient funds, 8/31/90 600

Outstanding checks, 8/31/90 2,750

Bank service charges for August 100

On August 31, 1990, Apex’s correct cash balance is

A. $18,550

B. $17,950

C. $17,850

D. $17,550

A. (Correct!)

Balance per bank statement $18,050

Plus deposit in transit 3,250

Less outstanding checks (2,750)

Equals ending cash balance $18,550

The effects of the bank service charges and the insufficient funds check are already reflected in the balance per bank statement. The bank was the source of that information.

---

Where in the problem did it say that this recnciliation is bank-to-true balance? It could also be bank-to-book, and if that were the case, you would include the 600 NSF and 100 Bank service charge. Why does it require you to assume what kind of reconciliation it is?

[Anonymous]

If you're going to use the BOOK balance, yes, you would include the NSF and BSC and exclude the deposits in transit & outstanding checks because they were ALREADY included in the book balance.

[Anonymous]

If you're going to use the BOOK balance, yes, you would include the NSF and BSC and exclude the deposits in transit & outstanding checks because they were ALREADY included in the book balance.

[MustPass1988]

Yeah, that's a tricky one. I would assume that because they're giving you the bank balance, the bank items are already included. If they had given you the cash balance, you would have had to reconcile those items but the bank balance had already included them.

AUD: PASSED [81]; Expired, retaking August 23rd
BEC: PASSED [83]; Expired, retaking July 11th
REG: PASSED [83]
FAR: FAILED [64]; Retaking May 23rd

[MustPass1988]

Yeah, that's a tricky one. I would assume that because they're giving you the bank balance, the bank items are already included. If they had given you the cash balance, you would have had to reconcile those items but the bank balance had already included them.

AUD: PASSED [81]; Expired, retaking August 23rd
BEC: PASSED [83]; Expired, retaking July 11th
REG: PASSED [83]
FAR: FAILED [64]; Retaking May 23rd

[seattleacct]

The “book” balance should always be the “true” balance, so you just use whatever information they give you. Since they didn't give you the beginning book balance, you should use the bank statement balance. And like the others posted, the bank balance already includes the returned check amount and bank fee.

There are two ways to get to the “true” balance (same end result):

Bank bal:

18,050 + 3,250 – 2,750 = 18,550 true cash balance

Books beg bal:

19,550 – 600 – 100 = 18,550 true cash balance

B:76
A:64, 73, 91!
R:77
F:76

CPAexcel, Wiley Test Bank, Ninja Audio & Notes

[seattleacct]

The “book” balance should always be the “true” balance, so you just use whatever information they give you. Since they didn't give you the beginning book balance, you should use the bank statement balance. And like the others posted, the bank balance already includes the returned check amount and bank fee.

There are two ways to get to the “true” balance (same end result):

Bank bal:

18,050 + 3,250 – 2,750 = 18,550 true cash balance

Books beg bal:

19,550 – 600 – 100 = 18,550 true cash balance

B:76
A:64, 73, 91!
R:77
F:76

CPAexcel, Wiley Test Bank, Ninja Audio & Notes

[Anonymous]

The purpose of the recon is to find the true balance by comparing the bank balance to the book balance and making any necessary adjustments. I think you might be stressing out and over thinking this. You should only have one cash balance and that should be the amount of cash you actually have in the bank.

[Anonymous]

The purpose of the recon is to find the true balance by comparing the bank balance to the book balance and making any necessary adjustments. I think you might be stressing out and over thinking this. You should only have one cash balance and that should be the amount of cash you actually have in the bank.

[Author]

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