When Preparing a Bank Reconciliation, You Should

question 10

Multiple Choice

When preparing a bank reconciliation, you should

• A) compare the amount of each check with that shown on the bank statement
• B) add outstanding check amounts to the check register balance
• C) subtract outstanding deposit amounts from the bank balance
• D) all the above

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Definitions:

Permanent/Temporary

Classification of accounts where permanent accounts represent balance sheet items carried over multiple periods, and temporary accounts are income statement items closed at the end of each period.

Normal Balance

The side of an account (debit or credit) on which increases to the account are recorded, determined by the account type.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity over a period of time.

Permanent/Temporary

Categories of accounts in accounting where permanent accounts appear on the balance sheet and temporary accounts are closed at year's end, affecting income summary.