Answered: The bank statement on 31 October 20X7…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 3E

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Question

The bank statement on 31 October 20X7 showed an overdraft of $800. On reconciling the bank

statement, it was discovered that a cheque drawn by your company for $80 had not been presented for

payment, and that a cheque for $130 from a customer had been dishonoured on 30 October 20X7, but

that this had not yet been notified to you by the bank.

What is the correct bank balance to be shown in the statement of financial position at 31 October

20X7?

A $1,010 overdrawn

B $880 overdrawn

C $750 overdrawn

D $720 overdrawn

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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