Practice prompt · Q:receivables-notes-credit-losses-and-transfers/cash-population-and-reconciled-balance-001

Reach the reported cash balance from both directions

Tests whether the learner both applies the cash equivalent test and reconciles the bank balance to the ledger.

Updated Sep 11, 2026 Review due Nov 18, 2026

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Company records show cash of 88,400. Its bank statement shows 91,450. A deposit of 12,000 made December 31 has not posted. Checks totalling 17,900 have not cleared. The bank returned a customer check for 2,800 and charged a 50 fee, neither yet recorded. A 60-day Treasury bill was bought in December for 25,000.

Bank reconciliation settles how much cash exists. The cash-equivalent test settles what else is reported beside it. Both have to be right before the balance sheet line means anything.

Choose the best answer. a Reconciled balance 85,550, and reported cash and cash equivalents of 110,550. b Reconciled balance 85,550, and reported cash of 85,550 with the Treasury bill shown as a short-term investment. c Reconciled balance 82,700, and reported cash and cash equivalents of 107,700. d Reconciled balance 88,400, because the ledger balance is the company's own record.

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Answer: a

Choice a. Both columns reach 85,550, and the 60-day bill joins it on the reported line for 110,550.