Service Charge and Interest on Loan Are Both Adjustments Required

question 122

True/False

Service charge and interest on loan are both adjustments required to the bank balance on a bank reconciliation.

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Definitions:

Monetary Unit Assumption

An accounting principle that assumes transactions can be recorded and expressed in a stable currency.

Economic Entity Assumption

An accounting principle that treats a company as a separate entity from its owners or other businesses, keeping its financial transactions distinct.

Revenue Recognition Principle

An accounting principle that dictates the specific conditions under which revenue is recognized or recorded.

Performance Obligation

A duty or task that a company must perform to satisfy a contractual commitment within a customer contract.