Sahara Company's Cash account shows an ending balance of $ 680. The bank statement shows a $ 19 service charge and an NSF check for $ 80. A $ 270 deposit is in transit, and outstanding checks total $ 360. What is Sahara's adjusted cash balance? A. $ 779 B. $ 581 C. $ 491 D. $ 590

$741

Explanation:

The account reconciliation is used to reconcile the cash balance per the books with the balance per the bank statement.

Reconciling items are usually transactions recognized in the books but omitted from the bank and vice versa. The adjusted bank balance is the balance arrived at after valid transactions that had hitherto not been recorded in the books have been adjusted for.

The items to be adjusted include the NSF which would be added back, the service charge which will be deducted. The deposit in transit and outstanding checks need not be adjusted for as the transactions have been recorded in the books and are still valid.

Adjusted bank balance = 680 - 19 + 80  (amount in $)

= $741

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