Notification by the Bank That a Deposited Customer Check Was

question 148

Multiple Choice

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

• A)Accounts Receivable Cash
• B)Cash Accounts Receivable
• C)Miscellaneous Expense Accounts Receivable
• D)No adjusting entry is necessary.

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Definitions:

Compounded Quarterly

Interest calculation method where interest is added to the principal sum of a deposit or loan every quarter.

Investments

The allocation of resources, often financial, in the expectation of generating an income or profit.

Monthly Compounded

Interest calculation method where interest is added to the principal balance monthly, leading to an increase in the amount of interest earned over periods.

Nominal Interest

The stated interest rate of a financial instrument, not accounting for inflation or compounding effects.