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:

Overhead

Overhead refers to the ongoing business expenses not directly tied to creating a product or service but necessary for the business's operations, such as rent, utilities, and salaries.

Law of Diminishing

Refers to the Law of Diminishing Returns, which states that adding more of one factor of production, while holding others constant, will at some point yield lower per-unit returns.

Marginal Returns

The change in output resulting from a one-unit increase in a particular input, while holding other inputs constant.

Marginal Cost

The rise in overall expenses associated with the production of an extra unit of a product or service.