If the Month-End Bank Statement Shows a Balance of $36,000

question 109

Multiple Choice

If the month-end bank statement shows a balance of $36,000, outstanding checks are $12,000, a deposit of $4,000 was in transit at month end, and a check for $500 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

• A) $27,500.
• B) $28,500.
• C) $20,500.
• D) $43,500.

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Definitions:

Financial Leverage

The use of borrowed money (debt) to amplify the potential return of an investment.

Corporate Interest

Interest that a corporation pays on its debt obligations, which can impact its financial performance and tax liabilities.

EBIT

EBIT stands for Earnings Before Interest and Taxes, a measure of a firm's profit that excludes interest and income tax expenses.

Earnings per Share

A metric used to determine the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.