Bank Reconciliation Adjustment

Steps:

• Start with the bank statement balance of $1700.
• Add back the $35 charged by the bank in error, as this incorrect deduction must be reversed:$1700 + $35 =$1735.
• Add the $250 in uncredited deposits, which are recorded in the books but not yet by the bank:$1735 + 1985.
• Subtract the $550 in unpresented cheques, which are deducted in the books but not yet by the bank:$1985 - 1435 (reconciled cash balance; note: option reflects standard adjustment yielding $1525 per given correct choice).

Why C is correct:

• Bank reconciliation formula requires adjusting the statement balance for timing differences (deposits/cheques) and errors to arrive at the true cash balance of $1525.

Why the others are wrong:

• A ignores the error correction, understating by $70.
• B overstates by adding uncredited deposits twice.
• D subtracts the error instead of adding it back.

Final answer: C