Identify Whether Each of the Following Items Affects the Bank

question 5

Essay

Identify whether each of the following items affects the bank side or the book side of a bank statement reconciliation._____ (1)Bank service charges_____ (2)Outstanding cheques_____ (3)Deposits in transit_____ (4)NSF cheque_____ (5)Interest on a chequing account_____ (6)The bank recorded a cheque for $958The bank printed cheques for the depositor._____ (8)Debit memo_____ (9)Credit memo_____ (10)The bank collected a $1,000 note for the depositor.

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Definitions:

Period Cost

Expenses that are not directly tied to production activity and are accounted for within the period they occur, such as selling and administrative expenses.

Net Operating Income

Earnings before interest and taxes (EBIT), representing the profit from regular business operations.

Common Fixed Expenses

Costs that do not change with the level of production or sales over a certain period and are shared among different segments or products of a business.

Total Fixed Expenses

Expenses that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.