Tang Company Assembled the Following Information in Completing Its June

question 116

Multiple Choice

Tang Company assembled the following information in completing its June bank reconciliation: balance per bank HK$21,460; outstanding checks HK$12,325; deposits in transit HK$13,750; NSF check HK$2,240; bank service charge HK$85; cash balance per books HK$25,210.As a result of this reconciliation, Tang will

• A)Reduce its cash account by $3,750.
• B)Increase its cash account by $1,425.
• C)Increase its cash account by $2,240.
• D)Reduce its cash account by ₤2,325.

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Definitions:

Fair Value Accounting

An accounting approach where assets and liabilities are recorded at their current market value, rather than their historical cost.

Financial Statements

Documents that report on a company's financial health and performance, including the balance sheet, income statement, and cash flow statement, offering insight into its operations and financial position.

Hierarchy Level

The level or rank of an entity within a broader organizational or systemic structure, often indicating its authority or responsibility level.

Fair Values

An estimate of the market value of an asset or liability, based on current prices in an open market.