Please Refer to the Following Bank Reconciliation - Journal Entries Are Required for the Reconciling Items on }\\
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question 138

Multiple Choice

Please refer to the following bank reconciliation: $\begin{array}{lr}\begin{array}{lr}\text { BANK }\\\hline\text { Balance, June } 30,2014 & \$ 10,241.43 \\\text { ADD: } & \\\text { Deposit in transit } & 5,113.40 \\\\\\\text { LESS: } & \\\text { Outstanding Check\# 506 } & (1,948.52) \\\text { Outstanding Check\# 510 } & (1,800.25) \\\\\text { Adjusted balance, June 30,2014 }&\underline{ \$ 11,606.06 }\\\end{array}\begin{array}{|lr}\text { BOOK }\\\hline \text { Balance, June } 30,2014 & \$ 9,745.06 \\\text { ADD: } & \\\text { Note collected by bank } &1,900.00 \\ \text { Interest revenue } & 75.00 \\& \\\text { LESS: } & \\\text { NSF check } &(79.00) \\\text { Bank service charge } & (35.00) \\\\\text { Adjusted balance, June } 30,2014 & \underline{\$ 11,606.06} \\\end{array}\end{array}$


- Journal entries are required for the reconciling items on the book side because:

• A) those transactions have not yet been recorded by the bank.
• B) the adjusted balances on both sides are the same amounts.
• C) the amounts are immaterial.
• D) those transactions have already occurred, but have not been recorded yet on the company books.

Comprehend and apply the return on investment (ROI) formula to evaluate company performance.

Calculate and interpret turnover as it relates to company investments and operations.

Understand the concept of net operating income and its role in assessing company performance.

Comprehend and apply the concept of residual income for performance evaluation.

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Definitions:

KSAOs

The knowledge, skills, abilities, and other characteristics that are necessary for a person to perform well in a job. Also referred to as job specifications, KSAOs are derived from job analysis.

Job Specifications

A detailed description of the qualifications, skills, and experience required to perform a specific job.

Abilities

The natural or acquired skills and talents that individuals possess, which enable them to perform specific tasks effectively.

Human Capital Stock

The collective skills, knowledge, and abilities that employees bring to their workplace, considered an asset to the organization.