In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information: Cash balance per company books on January 30 $ 4,725 Deposits in transit at month-end $ 1,800 Outstanding checks at month-end $ 520 Bank service charges $ 25 EFT automatically deducted monthly, not yet recorded by Maxi $ 380 An NSF check returned on a customer account $ 265 The adjusted cash balance per the books on January 31 is:

Explanation:

Bank reconciliation is a process by which bank balance in the cash book is reconciled to the balance in the bank statement to identify likely discrepancies

Bank reconciliation for Maxi's clothing as at January 30

Cash balance as per cash book = 4,725

Bank charges                                   (25)

EFT deducted by the bank             (380)

NSF check returned on a                (265)

customer account

Adjusted cash book balance          4,055.

In bank reconciliation , deposit in transit and outstanding checks at month end are adjusted on the bank statement as they have already been captured in company's  cash book

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