If a Bank Reconciliation Included a Credit Memo for a $2,000

question 32

Multiple Choice

If a bank reconciliation included a credit memo for a $2,000 note collected with an additional $20 of interest revenue, the entry to record this reconciling item would include a:

• A)credit to note receivable for $2,020.
• B)credit to cash for $2,020.
• C)debit to cash for $2,020.
• D)No entry is required.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that serves as a global framework for financial reporting.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards used for financial reporting and accounting in the U.S.

Net Realizable Value

The estimated selling price in the ordinary course of business minus the estimated costs of completion and the necessary costs to make the sale.

Replacement Cost

The current cost of replacing an asset with a similar new asset.