Question

Based on the following information, determine the true balance in your checking account.

Balance in your checkbook	$	433		Interest earned on the account	$	6
Balance on bank statement		586		Total of outstanding checks		224
Service charge and other fees		15		Deposits in transit		62

Answer 1

Solution :

In order to arrive at the true balance in the checking account, it has to be adjusted for the bank transactions that have not been updated in the check book.

(Note :  It is assumed that the total of outstanding checks and deposits have already been considered in the check book )

Thus the true balance in the checkbook = Balance in the checkbook + Interest earned on the account - Service charge and other fees

= $ 433 + $ 6 - $ 15 = $ 424

Thus the true balance in the checking account = $ 424