In Preparing a Bank Reconciliation Statement for a Business with a Substantial

question 12

Multiple Choice

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $870 from a debtor paid directly into the company's bank account is to:

• A) add it to the balance as per bank statement.
• B) deduct it from the balance as per bank statement.
• C) add it to the balance per company records.
• D) deduct it from the balance per company records.

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Definitions:

Sole Proprietorships

A simple business structure where a single individual owns and operates the business.

Action Against Directors

Legal proceedings initiated to hold directors of a company responsible for their actions or omissions that harm the company or its stakeholders.

Preferred Shares

A type of stock that offers dividends at fixed rates before any dividends can be issued to common shareholders and typically does not carry voting rights.

Voting Shares

Company shares that grant the shareholder the right to vote on corporate matters.