If a Check Correctly Written and Paid by the Bank

question 70

Multiple Choice

If a check correctly written and paid by the bank for $724 is incorrectly recorded on the company's books for $742 the appropriate treatment on the bank reconciliation would be to

• A) add $18 to the bank's balance.
• B) add $18 to the book's balance.
• C) deduct $724 from the bank's balance.
• D) deduct $724 from the book's balance.

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Definitions:

Guaranteed Dividend

A dividend that is promised to be paid to shareholders of a company out of future earnings or profit.

Noncumulative Preferred Stock

Noncumulative preferred stock is a type of preferred stock where missed dividend payments are not required to be paid back to the shareholder.

Callable Preferred Stock

Callable preferred stock is a type of preferred share that gives the issuer the right to redeem the stock at a predetermined price after a specific date.

Cumulative Preferred Stock

A type of preferred stock that has a feature where missed dividend payments accumulate and must be paid out before dividends can be issued to other stock types.