How Would Outstanding Cheques Be Handled When Reconciling the Ending

question 151

Multiple Choice

How would outstanding cheques be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

• A) They would be added to the balance of the bank statement.
• B) They would be subtracted from the balance of the bank statement.
• C) They would be added to the balance per books.
• D) They would be ignored.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in product costs.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume.

Absorption Costing

An accounting method that includes all of the manufacturing costs in the cost of a product, including direct labor, materials, and overhead.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.