Based on the following information, how much is the correct cash in bank assuming the cash balance per book is P500,000? Bank service charge 100,000Outstanding check 200,000NSF check 30,000Group of answer choices400,000370,000200,000170,000
Question
Based on the following information, how much is the correct cash in bank assuming the cash balance per book is P500,000? Bank service charge 100,000Outstanding check 200,000NSF check 30,000Group of answer choices400,000370,000200,000170,000
Solution
To calculate the correct cash in bank, you need to adjust the cash balance per book by the given items. Here are the steps:
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Start with the cash balance per book, which is P500,000.
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Subtract the bank service charge. This is an expense that reduces your cash balance. So, P500,000 - P100,000 = P400,000.
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Do not adjust for the outstanding check. This is a check that you've written, but it hasn't cleared the bank yet. It's already been accounted for in your book balance.
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Subtract the NSF (Non-Sufficient Funds) check. This is a check that was returned due to insufficient funds in the check writer's account. So, P400,000 - P30,000 = P370,000.
So, the correct cash in bank is P370,000.
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