38. The cash account shows a balance of $20,000 before reconciliation. The bank statement does not include a deposit of $4,600 made on the last day of the month. The bank statement shows a collection by the bank of $1,980 and a customer's check for $650 was returned because it was NSF. A customer's check for $690 was recorded on the books as $960, and a check written for $159 was recorded as $195. The correct balance in the cash account was A) $21,024. B) $21,096. C) $21,564. D) $25,696. 39. Deposits in transit A) have been recorded on the company's books but not yet by the bank. B) have been recorded by the bank but not yet by the company, C) have not been recorded by the bank or the company. D) are checks from customers which have not yet been received by the company. 40. If a check correctly written and paid by the bank for $418 is incorrectly recorded on the company's books for $481, the appropriate treatment on the bank reconciliation would be to A) add $63 to the bank's balance. B) add $63 to the book's balance. C) deduct $63 from the bank's balance. D) deduct $418 from the book's balance. 41. Two bases for estimating uncollectible accounts are: A) percentage of assets and percentage of sales. B) percentage of receivables and percentage of total revenue. C) percentage of current assets and percentage of sales. D) percentage of receivables and percentage of sales. 42. When an account is written off using the allowance method, accounts receivable A) is unchanged and the allowance account increases. B) increases and the allowance account increases. C) decreases and the allowance account decreases. D) decreases and the allowance account increases