Accompanying the Bank Statement Was a Credit Memo for a Short-Term

question 148

Multiple Choice

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

• A) debit Notes Receivable; credit Cash
• B) debit Cash; credit Miscellaneous Income
• C) debit Cash; credit Notes Receivable and Interest Revenue
• D) debit Accounts Receivable; credit Cash

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Definitions:

Block Grant

A grant from a central government that a local authority can allocate to a wide range of services.

Categorical Grant

A type of federal aid given to state and local governments with strict limitations on how the money can be spent, usually tied to specific programs or projects.

Categorical Grants

Federal grants that can only be used for specific purposes and usually require that the state or local government contribute money and meet certain conditions.

Federal Subsidies

Financial support provided by the federal government to individuals, businesses, or other governmental units in support of activities deemed beneficial to the public interest.