If a Company Erroneously Records a $500 Deposit as $400

question 19

Multiple Choice

If a company erroneously records a $500 deposit as $400 in its books, which of the following must occur when reconciling the bank statement?

• A) The company will have to increase the balance per the bank statement by $100.
• B) The company will have to increase the balance per the books by $100.
• C) The company will have to decrease the balance per bank statement by $100.
• D) None of the above

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Book Value

The net value of a company's assets minus its liabilities, often used to determine the value of a company's shares.

Operating Assets

Resources employed in a business's regular activities for income generation, such as money, stock, and machinery.

Static Budget

A fixed budget that does not change or adjust over the budget period, irrespective of changes in actual activity levels.