13The cash balance of AA Company had the following information:DescriptionsNovemberDecember Cash balances per bookP1,200,000P1,450,000 Cash balances per bank1,400,0001,838,500 Bank service charges12,00011,500 NSF checks100,000150,000 Notes collected by the bank350,000410,000 Deposit in transit320,000? Outstanding checks?185,000 Book debit error 25,000– Book credit error50,00070,000 Bank credit error–65,000 Bank debit error75,00090,000 Bank receipts 2,550,000 Book disbursements 1,920,000 Note: errors were corrected in the following period. No other errors affecting the cash balances. Statement 1; The amount of deposit in transit as of December 31, 2022 is P90,000.Statement 2: The amount of outstanding checks as of November 30, 2022 is P272,000.Group of answer choicesBoth statements are falseBoth statements are trueOnly statement 1 is trueOnly statement 2 is true

An entity's bank account and its financial records are compared using a bank reconciliation…

Answered: 13 The cash balance of AA Company had…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 5E

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The cash balance of AA Company had the following information:

Descriptions	November	December
Cash balances per book	P1,200,000	P1,450,000
Cash balances per bank	1,400,000	1,838,500
Bank service charges	12,000	11,500
NSF checks	100,000	150,000
Notes collected by the bank	350,000	410,000
Deposit in transit	320,000	?
Outstanding checks	?	185,000
Book debit error	25,000	–
Book credit error	50,000	70,000
Bank credit error	–	65,000
Bank debit error	75,000	90,000
Bank receipts		2,550,000
Book disbursements		1,920,000
Note: errors were corrected in the following period. No other errors affecting the cash balances.

Statement 1; The amount of deposit in transit as of December 31, 2022 is P90,000.

Statement 2: The amount of outstanding checks as of November 30, 2022 is P272,000.

Group of answer choices

Both statements are false

Both statements are true

Only statement 1 is true

Only statement 2 is true

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