Description
The following data were accumulated for use in reconciling the bank account of Zek’s Co. for May 2016:
| 1. | Cash balance according to the company’s records at May 31, 2016, $22,110. |
| 2. | Cash balance according to the bank statement at May 31, 2016, $29,650. |
| 3. | Checks outstanding, $13,875. |
| 4. | Deposit in transit, not recorded by bank, $6,770. |
| 5. | A check for $50 in payment of an account was erroneously recorded in the check register as $500. |
| 6. | Bank debit memo for service charges, $15. |
| A. | Prepare a bank reconciliation, using the format shown in
Exhibit 13
. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. The word “Deduct:” or “Add:” will automatically appear if it is required. |
| B. | If the balance sheet were prepared for Zek’s Co. on May 31, 2016, what amount should be reported for cash? |
| C. | Must a bank reconciliation always balance (reconcile)? |