If a Cheque Correctly Written and Paid by the Bank

question 62

Multiple Choice

If a cheque correctly written and paid by the bank for $521 is incorrectly recorded on the company's books for $251, the appropriate treatment on the bank reconciliation would be to

• A)add $270 to the balance per bank.
• B)add $270 to the balance per books.
• C)deduct $270 from the balance per books.
• D)deduct $270 from the balance per bank.

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Definitions:

Variable Costs

Expenses that change in proportion to the level of activity or production volume.

Static Budget

A budget that does not change or adapt over time, based on the assumption of a fixed level of activity.

Activity Index

The activity that causes changes in the behavior of costs.

Variable Costs

Costs that vary directly with the level of production or service output, such as materials and labor.