A Bank Reconciliation Should Be Prepared Periodically Because

question 6

Multiple Choice

A bank reconciliation should be prepared periodically because

• A) the company's records and the bank's records are in agreement
• B) the bank has not recorded all of its transactions
• C) any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected
• D) the bank must make sure that its records are correct

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Definitions:

Conversion Cost

The sum of labor and overhead expenses incurred to convert raw materials into finished products.

Direct Materials Cost

The cost of raw materials that are directly used in the production of a product.

Factory Overhead Cost

Indirect manufacturing expenses that are not directly tied to the production of goods, like utilities and salary of supervisors.

Direct Labor Cost

The total cost of all labor directly involved in the production of goods or services, excluding indirect labor costs.