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:

Management Responsibilities

The duties and obligations that managers have to oversee and guide their organization effectively.

Personal Liability

The legal responsibility of an individual to satisfy debts or obligations from their personal assets.

Joint Stock Company

A partnership agreement in which company members hold transferable shares, whereas all the goods of the company are held in the names of the partners.

Partnership Agreement

A legal document that specifies the rights, responsibilities, and profit and loss distribution among business partners.