While Preparing the Bank Reconciliation, You Notice That a Check

question 171

Multiple Choice

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months.What is the best action for you to take?

• A)Void the check.If it has not been cashed in 5 months, it will never be cashed.
• B)Issue a replacement check because you assume the original check has been lost.
• C)Wait 3 more months to give the bank more time to clear the check.
• D)Investigate to determine why the check has not cleared.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the market.

Common Stock

An equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Stock Transfer Agent

A third-party firm hired by a company to track and manage its stockholders and transactions, including transfers and issuance of stock certificates.

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a company.