If the Balance on the Bank Statement Does Not Equal

question 110

Multiple Choice

If the balance on the bank statement does not equal the balance in the company's Cash account,then you can conclude that:

• A) the company accountant made an error in the accounting process
• B) the bank made an error
• C) both the company accountant and the bank made errors
• D) there are some reconciling items that, when identified, will explain the differences between the balances

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Definitions:

Inventory

Assets in the form of materials, work-in-progress, or finished goods held by a company to be sold in the ordinary course of business.

Perpetual Inventory System

An inventory management approach where updates to inventory records are made immediately following each transaction.

Cost Of Goods Sold

The direct monetary charges for materials and labor involved in the creation of goods a business sells.

Credit Terms

The conditions under which credit is extended by a lender to a borrower, including the repayment schedule, interest rate, and due date.