When Reconciling a Bank Statement for the Operating Checking Account

question 20

Multiple Choice

When reconciling a bank statement for the operating checking account of a medical practice, the bookkeeper sees two bank charges of $25 for stopping payment on checks that vendors said did not arrive in the mail. The bookkeeper should ____.

• A) transfer $50 from the cash account to the operating checking account
• B) make two journal entries in the account ledger
• C) write new checks to the vendors that are $25 less than the original checks
• D) find new vendors that are less likely to misplace checks

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Definitions:

Risk-Free Rate

The theoretical rate of return on an investment with no risk of financial loss.

Portfolio Beta

A measure that indicates the sensitivity of a portfolio's returns to the overall market movements.

Expected Beta

The prediction of the beta coefficient, which measures an asset's volatility or risk relative to the market as a whole.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically represented by the yield on government securities.