A Payment for $25 Is Incorrectly Recorded on the Checkbook

question 92

Multiple Choice

A payment for $25 is incorrectly recorded on the checkbook stub as $52.The $27 error should be shown on the bank reconciliation as:

• A)added to the balance per bank statement.
• B)deducted from the balance per bank statement.
• C)added to the balance per books.
• D)deducted from the balance per books.

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Definitions:

Market Price

The price at which an asset or service is traded in the open market.

Short-term Profits

Refers to the earnings generated by a company over a short period, typically within a year.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership interest held by shareholders.

Available-for-sale Securities

Financial assets that are neither classified as held-to-maturity nor trading securities, and can be sold in the short-term depending on financial needs or market conditions.