A Bank Reconciliation Included an Outstanding Check of $1,300 for the Purchase

question 21

Multiple Choice

A bank reconciliation included an outstanding check of $1,300 for the purchase of supplies. The journal entry to record this reconciling item:

• A)should debit Accounts Receivable and credit Cash for $1,300.
• B)should debit Cash and credit Supplies for $1,300.
• C)should debit Supplies and credit Cash for $1,300.
• D)is not required.

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Definitions:

Account Receivable

Signifies the amount of money that customers owe a company for products or services that have been provided but are still unpaid.

Accounting Equation

The foundational formula in accounting, represented as Assets = Liabilities + Equity, underscoring the balance sheet structure.

Stockholders' Equity

The ownership interest of shareholders in the assets of a company, calculated as total assets minus total liabilities.

Net Income

The amount of profit a company generates after all expenses, taxes, and costs have been subtracted from its total revenue.