The City of Burlington Borrowed $350,000 Via a Tax Anticipation

question 62

Multiple Choice

The City of Burlington borrowed $350,000 via a tax anticipation note.  If the city repaid the note three months later, the General Fund entry to record the repayment and interest of $2,750 will include

• A) A debit to Tax Anticipation Notes Payable for $350,000.
• B) A debit to Expenditures for $352,750.
• C) A debit to Expenditures for $2,750.
• D) A debit to Tax Anticipation Notes Payable for $350,000 and a debit to Expenditures for $2,750.

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Definitions:

Verification

The process of ensuring the accuracy and validity of data or documents.

Bank Reconciliation

A process that explains the difference between the bank balance shown in a company's bank statement and its financial records.

NSF Check

A check that cannot be processed due to insufficient funds in the account it is drawn on, commonly known as a bounced check.

Outstanding Checks

Checks that have been written and recorded in financial accounts but have not yet been cashed or cleared by the bank.