If a Check Correctly Written and Paid by the Bank

question 76

Multiple Choice

If a check correctly written and paid by the bank for $517 is incorrectly recorded on the company's books for $571, the appropriate treatment on the bank reconciliation would be to

• A) add $54 to the bank's balance.
• B) add $54 to the book's balance.
• C) deduct $54 from the bank's balance.
• D) deduct $517 from the book's balance.

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Definitions:

Fixed Expenses

Costs that remain constant regardless of the level of production or business activity.

Sales

The total revenue generated from goods or services sold by a company during a specific period.

Residual Income

A measure of the excess profit that exceeds the required rate of return on investment.

Required Rate Of Return

The minimum return an investor expects to achieve by investing in a particular asset, reflecting the risk level of the investment.