If a Bank Statement Includes an EFT Payment of $945

question 24

Multiple Choice

If a bank statement includes an EFT payment of $945 for insurance, the journal entry to record this reconciling item should include a:

• A)debit to Cash for $945.
• B)debit to Accounts Payable for $945.
• C)credit to Cash for $945.
• D)credit to Prepaid Insurance for $945.

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Definitions:

Terminable

Describing something, such as a contract or employment, that can be ended or terminated, usually under specific conditions outlined within the agreement.

Revocation

The official withdrawal or cancellation of a right, privilege, license, or contract, often by the party who granted it or by law.

Renunciation

The formal rejection of a claim, right, or possession, often in a legal context.

Gratuitous Agent

A person who voluntarily undertakes to perform a service for another without receiving any compensation.