[chappycg]

Jones Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Jones Company issued checks totaling $38,900. The July bank statement shows that $26,300 in checks cleared the bank in July. A check from one of Jones Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Davis Company's July bank reconciliation should be


A. $7,200
B. $12,600
C. $17,700
D. $18,000

[pready]

When you do a bank reconciliation you deduct your check outstanding to the bank balance.

In your example you would deduct the amount of checks that have cleared your bank from your beiginning outstanding checks + checks issued during the month.