Ratios Are Useful in Explaining The

question 74

Multiple Choice

Ratios are useful in explaining the:

• A) differences between companies
• B) relationships between financial data
• C) trends within industries
• D) reasons for financial performance

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Definitions:

Journal Entries

The method of recording financial transactions where each transaction is noted in two accounts in the ledger to maintain the accounting equation's balance.

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement, to ensure accuracy and completeness of the records.

Erroneously Charged

Incorrectly or mistakenly billed for goods or services, leading to inaccurate financial transactions.

Bank Statement Balance

The ending cash balance as recorded in the bank's records at the end of a reporting period.