In Comparing the Canceled Checks on the Bank Statement with the Entries

question 131

Multiple Choice

In comparing the canceled checks on the bank statement with the entries in the accounting records,it is found that check number 4239 for November's rent was correctly written and drawn for $7,390 but was erroneously entered in the accounting records as $3,790.When reconciling the November bank statement,the company should:

• A)Deduct $3,600 from the book balance of cash.
• B)Add $3,600 to the bank statement balance.
• C)Add $7,390 to the book balance of cash.
• D)Deduct $3,600 from the bank statement balance.
• E)Add $3,600 to the book balance of cash.

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Definitions:

Medicare Taxes

Taxes deducted from employee paychecks and also matched by employers to fund the Medicare program, a federal health insurance program for individuals who are 65 and older and for some younger people with disabilities.

Accrued Salaries

Salaries that have been earned but not yet paid to employees by the end of an accounting period.

Unemployment Compensation Tax

A tax that employers pay to the government, which is used to fund unemployment benefits for workers who have lost their jobs.

Salaries Payable

Salaries payable represent the amount of salary expenses that have been incurred by a business but have not yet been paid to employees.