In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:

Since bank service had been deducted from the bank, Maxis clothing had to deduct the same amount. When bank deducts any money, generally it notifies through text message or sometimes does not notify directly. Therefore, It had to be deducted from the cash book.

Through Electronic Fund Transfer (EFT), a payment had been made by the bank for Maxi clothing. Since the expense did not deduct from the cash book, the amount had to deduct it to get the adjusted book value.

Solution:

To find the adjusted book balance, we need the ending balance of the cash book:

Book balance $4,725

Less: bank service charges (25)

Less: EFT (380)

Less: NSF check returned by bank (265)

Adjusted book balance $4,055

Maxi's accounts receivable paid him a check and the firm immediately added the amount to the cash book. When the accountant went for depositing the check, there were not sufficient fund (NSF). Therefore, the amount did not add to the bank balance. Hence, the firm had to deduct it again.

To learn more about ETF with the given link

https://brainly.com/question/15169791

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Question:

In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:

Cash balance per company books on January 30 $4,725

Deposits in transit at month-end $1,800

Outstanding checks at month-end $520

Bank service charges $25

EFT automatically paid monthly, not yet recorded by Maxi $380

An NSF check returned on a customer account $265

The adjusted cash balance per the books on January 31 is:

(A) $5,855

(B) $4,585

(C) $5,335

(D) $4,055

(E) $4,815