If the Balance on the Bank Statement Does Not Equal

question 182

Multiple Choice

If the balance on the bank statement does not equal the balance in the cash account, then it can be assumed that:

• A) The company has no errors in its records concerning the cash account.
• B) The bank has made errors in preparing the statement.
• C) The company has made errors in is records concerning the cash account.
• D) There will be items reconciling the difference.

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Definitions:

Inventory

The total stock of goods or materials a company holds for the purpose of resale or production.

CCA Depreciation

Capital Cost Allowance, a system in Canada that determines how a business can claim depreciation on tangible capital assets for tax purposes.

FIFO

"First In, First Out," an accounting method for valuing inventory where the oldest items are sold first.

Straight-Line

A method of calculating depreciation of an asset which assumes the asset will lose an equal amount of value each year.