If a Bank Reconciliation Included Deposits in Transit Amounting to $3,700

question 137

Multiple Choice

If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item:

• A)should debit Deposit in Transit and credit Cash for $3,700.
• B)should debit Cash and credit Deposit in Transit for $3,700.
• C)should debit Accounts Receivable and credit Cash for $3,700.
• D)is not required.

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Definitions:

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Total Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, or insurance premiums.

Silk Flower Arrangements

Artificial flower displays made from silk and other materials, designed to replicate the appearance of natural flowers.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.