Which of the Following Statements Is True Regarding a Credit

question 5

Multiple Choice

Which of the following statements is true regarding a credit memo and its relationship to a company's bank reconciliation procedures?

• A)It must be recorded as a credit to the balance per the customer's records.
• B)It is issued to notify a company of bank service charges which need to be recorded on the company's records.
• C)It is issued when a customer gives the company an NSF check which needs to be recorded on the company's records.
• D)It must be recorded as a debit to the balance per the company's records.

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Definitions:

Parent

In a business context, the term usually refers to a parent company that holds a controlling interest in subsidiary companies.