Accompanying the Bank Statement Was a Debit Memo for an NSF

question 68

Multiple Choice

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a (n)

• A) deduction from the balance per company's records
• B) addition to the balance per bank statement
• C) deduction from the balance per bank statement
• D) addition to the balance per company's records

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Definitions:

Incremental Costs

The additional costs incurred if a company increases its production or level of operations.

Direct Materials

Raw materials directly used in the production of goods, easily traceable to the product being manufactured.

Operating Income

The profit realized from a business's core operations after deducting operating expenses such as wages and cost of goods sold, but before taxes and interest.

Direct Labor

The cost of wages for those workers directly involved in the production of goods or services, not including support staff.