If a Check Correctly Written and Paid by the Bank

question 13

Multiple Choice

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682, the appropriate treatment on the bank reconciliation would be to

• A)add $54 to the book's balance.
• B)subtract $54 from the book's balance.
• C)deduct $54 from the bank's balance.
• D)deduct $628 from the book's balance.

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Definitions:

Interest Rate

The fee a lender imposes on a borrower for asset usage, represented as a proportion of the principal amount.

Note

An instrument of debt that specifies the terms under which monies are borrowed and must be repaid, including interest rates and due date.

Notes Receivable

Written promises for amounts to be received within a certain period, recognized as assets on the balance sheet.

Contingent Liability

A potential obligation that depends on a future event arising from past transactions or events.