Carothers Company Assembled the Following Information in Completing Its March

question 223

Multiple Choice

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800. As a result of this reconciliation, Carothers will

• A) reduce its cash account by $50.
• B) reduce its cash account by $210.
• C) reduce its cash account by $950.
• D) increase its cash account by $110.

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Definitions:

Indexing

The practice of adjusting financial figures or static amounts by a designated benchmark or index to reflect changes in economic indicators.

Categorical Grants

Federal funds provided to states and localities, earmarked for specific, narrowly defined purposes, usually with conditions attached.

Unfunded Mandates

Regulations or requirements imposed by higher levels of government without providing corresponding funds to cover the costs.

Block Grants

Funds provided by the federal government to state and local governments to support broad purposes with relatively few restrictions on how they are spent.