When You Identify Interest Received from the Bank in Performing

question 14

Multiple Choice

When you identify interest received from the bank in performing a bank reconciliation,you must:

• A)add the amount of interest to the balance per bank.
• B)deduct the amount of interest from the balance per books.
• C)add the amount of interest to the balance per books.
• D)deduct the amount of interest from the balance per bank.

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Definitions:

Receivable Turnover Ratio

A financial metric that measures how efficiently a company collects cash from its credit sales by calculating the number of times average receivables are collected during a period.

Average Days

Average days, often related to accounts receivable and payable, refers to the average number of days it takes a company to collect payments from customers or the time it takes to pay suppliers.

Liquidity Ratios

Financial metrics used to assess a firm's ability to meet its short-term obligations, with common examples including the current ratio and quick ratio.