If a Check That Was Outstanding on Last Period's Bank

question 171

Multiple Choice

If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period,in preparing this period's reconciliation,the amount of this check should be:

• A)Added to the book balance of cash as an outstanding check.
• B)Deducted from the book balance of cash as an outstanding check.
• C)Added to the bank balance of cash as an outstanding check.
• D)Deducted from the bank balance of cash as an outstanding check.
• E)Ignored in preparing the period's bank reconciliation as an outstanding check.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the accounting period begins based on estimated costs and activity levels.

Traditional Costing

An accounting method that assigns overhead costs to products based on a standard measure, often leading to less accuracy in modern, complex manufacturing environments.

Direct Labor-Hours

The total hours worked by employees that are directly involved in the production process.

Unit Product Cost

Unit product cost is the total cost (including materials, labor, and overhead) divided by the total number of units produced, representing the cost per unit.