The Opening Balance in Your Checking Account Was $1000

question 48

Multiple Choice

The opening balance in your checking account was $1000. During the month you had the following activity: wrote checks for $45.00 and $75.00 but only the first one cleared; had debit card transactions for $50 and $35.20; received a bank charge for the account of $6, deposited a check you received from a friend for $100 but it did not clear by month end. What is your month end account balance?

• A) $1052.13
• B) $875.45
• C) $863.80
• D) $888.80

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Definitions:

Net Operating Income

A company's revenue minus its direct costs and operating expenses, indicating the profitability from regular operations before interest and taxes.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the price of a product.

Net Operating Income

The profit generated from a business's normal core operations, excluding deductions of interest and taxes.

Variable Costing

An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost.