Jack and Jill Have Trouble Keeping Their Checking Account Balanced

question 180

Multiple Choice

Jack and Jill have trouble keeping their checking account balanced.Because they never know how much is really in their account,they have an automatic funds transfer agreement with their bank.When Jack or Jill writes a bad check,what will happen?

• A)The needed funds will automatically be borrowed from their Visa account.
• B)The needed funds will automatically be transferred from their savings account.
• C)The bank will honor the check and then call Jack and Jill and ask that they deposit the needed funds into checking as soon as possible.
• D)The bank will stamp the check "insufficient funds" and return it to the payee.

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Definitions:

Cost-to-retail Ratio

A method used to estimate the value of ending inventory and cost of goods sold by comparing the cost of goods available for sale to the retail price of the goods.

Declining Prices

A situation where the prices of goods or assets are decreasing over time, often leading to negative impacts on economies or markets.

Retail Inventory Method

A method of valuing inventory based on the retail price of goods, used primarily in retail sectors for inventory estimation.

Average Cost Retail Inventory Method

An inventory costing method that values inventory at the average cost of goods available for sale during the period, used to estimate the inventory's cost and ending inventory value.