Because of limited funds, Pizza Express employed only one accountant who was res
ID: 2482987 • Letter: B
Question
Because of limited funds, Pizza Express employed only one accountant who was responsible for receiving cash, recording receipts and disbursements, preparing deposits, and preparing the bank reconciliation. The accountant left the company on June 8, 2014, after preparing the May 31 bank reconciliation. His replacement compared the checks returned with the bank statement to the cash disbursements journal and found the total of outstanding checks to be $3,495.
Following is a bank reconciliation for Pizza Express for May 31, 2014:Explanation / Answer
Bank Reconciliation Statement:
Cash Balance as per bank statement 20,275
Add: Deposit in transit 4,475
Less: Outstanding checks 425
Adjusted Cash Balance as per Bank 24,325
Cash Balance as per Books 23,380
Add: Note collected by bank 2,445
Less: Bank Service Charge 50
Less: Automatic Payment on Loan 1,450
Adjusted Cash Balance as per Bank 24,325