Molly's Inc. general ledger reflects a cash balance of $22,400 at April 30, 2014. The bank...

Molly's Inc. general ledger reflects a cash balance of $22,400 at April 30, 2014. The bank balance per the April bank statement reflects a balance of $22,300. Bank charges for the month are $50. Which of the following statements is true?

None of the others alternatives are correct

Molly's Inc. has recorded twice the bank charges for the month of $50.

Every month Molly's Inc. general ledger balance will be higher than the bank balance.

Every month Molly's Inc. general ledger balance will be lower than the bank balance due to temporary differences.

There is an unknown difference between the general ledger and bank balance of $50.

Expert Solution

Every month Molly's Inc. general ledger balance will be lower than the bank balance due to temporary differences

explanation:

Balance as per cash balance is $22,400 and you are given charges of $50 , assuming these have not been considered in books of accounts we update our cash balance i.e. 22400-50 = 22350

s now we have cash balance $22,350 and balance as per bank is $22,300

the question does not state about the remaining differences.

so unless Molly inc does not discovers the remaining $50 balance, the ledger balances will show differences

ekkarill92 answered 2 years ago

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