Accompanying the Bank Statement Was a Credit Memo for a Short-Term

question 148

Multiple Choice

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

• A) debit Notes Receivable; credit Cash
• B) debit Cash; credit Miscellaneous Income
• C) debit Cash; credit Notes Receivable and Interest Revenue
• D) debit Accounts Receivable; credit Cash

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Definitions:

Brand-name Drugs

Medications marketed under a proprietary, trademark-protected name, often more expensive than generic versions.

Rolled Over

Refers to a situation where an investment or loan is extended beyond its original maturity date.

Gain Interest

The process of earning interest on capital, either through investments, savings, or lending activities.

Tax-sheltered Savings

Savings accounts or investment options that offer tax benefits, such as tax deferral or reduced tax rates on earnings.