Florida Building Contractor Business/Finance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Florida Building Contractor Business/Finance Exam with quizzes and structured questions. Enhance your understanding with study aids and detailed explanations. Excel in your exam preparation!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

If a company recorded its June 15 receipts as $165, but the actual receipts were $156, what adjustment is needed to the Cash balance per books?

Increase by $9
Decrease by $9
No adjustment needed
Recalculate total receipts only

The correct answer is: Decrease by $9

In this scenario, the company initially recorded its cash receipts as $165, but the actual cash receipts were only $156. To reconcile the cash balance per books with the actual receipts, an adjustment is necessary. Since the recorded amount of $165 is greater than the actual amount of $156, this indicates that the company has overstated its cash receipts. To correct this error, the company must decrease the cash balance in its books by the difference between the recorded amount and the actual amount. The difference here is $165 (recorded) minus $156 (actual), which equals $9. Therefore, to align the book balance with the actual cash received, the company needs to decrease the cash balance by $9. This adjustment ensures that the financial records accurately reflect the company's cash position, maintaining proper accounting practices.