Broker Garcia's escrow account shows a book balance of $45,000, but the bank statement shows $43,500. After reviewing records, he finds an outstanding check for $2,000 and a deposit in transit of $500. What should the reconciled balance be?
Correct Answer
B) $42,000
Correct: Bank balance $43,500 - outstanding check $2,000 + deposit in transit $500 = $42,000 reconciled balance. Why not A: Incorrectly subtracted the deposit in transit. Why not C: This is the book balance before reconciliation adjustments. Why not D: Incorrectly added the outstanding check instead of subtracting it.
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