How Many of the Statements Regarding Bank Reconciliations Appearing Below

question 119

Multiple Choice

How many of the statements regarding bank reconciliations appearing below are true?
A bank reconciliation is an internal report prepared to verify the accuracy of both the cash account of a business or individual and the bank statement.
After preparing a bank reconciliation, no adjusting journal entries need to be made for outstanding checks or deposits in transit.
If a company's records show a different cash balance from that shown on the company's bank state ment, either the company or the bank has made an error.

• A) None
• B) One
• C) Two
• D) Three

---

Definitions:

Book Value

The net value of a company's assets, subtracting its liabilities, as recorded on the balance sheet.

Liquid Assets

Assets that can be quickly converted into cash without significant loss of value, such as stocks or government bonds.

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.

Non-Cash Expenses

Expenses recorded on the income statement that do not involve an actual cash flow, such as depreciation and amortization.