While Preparing the Bank Reconciliation, You Notice That a Check

question 171

Multiple Choice

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months.What is the best action for you to take?

• A)Void the check.If it has not been cashed in 5 months, it will never be cashed.
• B)Issue a replacement check because you assume the original check has been lost.
• C)Wait 3 more months to give the bank more time to clear the check.
• D)Investigate to determine why the check has not cleared.

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Definitions:

Consumption

The act of using goods and services for personal use, often considered in economic terms as an indicator of economic health.

Disposable Income

Fiscal space for households' spending and saving maneuvers after settling income taxes.

MPS

Marginal Propensity to Save, which measures the fraction of additional income that is saved rather than spent on consumption.

Saving

The act of setting aside a portion of current income for future use, either by holding it as cash or putting it into investment accounts.