a) You have an account at Bank A. Your last balance statement
shows an ending balance of $100. This month you deposit $750 in
your account and withdrew $350. The you wrote 9 checks, four of
which clears. The checks that have cleared totals $400. The last
remaining check total $370. You will pay a $25 fee to the bank that
month. What is the adjusted bank balance (accounting for the
unclear checks as well)? Show work.
b) What is the difference between a bank balance and an adjusted
bank balance?
a.
Adjusted Bank Balance = Ending Balance - uncleared checks - Bank Fee
= 100 - 370 - 25 = -$295
b.
The difference between a bank balance and adjusted bank balance is that banks debit and credit the transactions which have occurred, while a company follows the accrual method of accounting calculate for the adjusted bank balance, which also incorporates the transactions which are to happen in near future. For example, the uncleared checks in the Question will not form the part of the bank statement but the company will account for the future liability.
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