From the Bank Reconciliation, No Entry Was Recorded for a Debit

question 116

Multiple Choice

From the bank reconciliation, no entry was recorded for a debit memo for a new check fee expense. This would cause:

• A) Cash to be understated.
• B) liabilities to be overstated.
• C) expenses to be understated.
• D) expenses to be overstated.

---

Definitions:

Brokers' Calls

The interest rate charged by banks on loans extended to brokerage firms for the purpose of funding clients' margin accounts.

Residual Claimant

An individual or entity entitled to a share of a company's assets only after all debts and other obligations have been met in the event of liquidation.

Unlimited Liability

A legal structure wherein the business owners are personally responsible for all the debts and liabilities of the business.

Voting Rights

The rights of shareholders to vote on company matters, typically exercised at annual meetings and proportional to the number of shares held.