If a Bookkeeper Mistakenly Records a Disbursement as $47 Instead

question 56

Multiple Choice

If a bookkeeper mistakenly records a disbursement as $47 instead of the correct amount of $74,the error should be shown on the bank reconciliation as a:

• A)$27 addition to the balance per books.
• B)$27 deduction from the balance per books.
• C)$36 addition to the balance per books.
• D)$36 deduction from the balance per books.

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Definitions:

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, investment, or debt repayment, instead of being paid out as dividends.

Dividend Policy

A company's strategy or guideline determining the amount of profits paid out to shareholders as dividends versus being reinvested in the business.

Tax Considerations

Tax considerations involve understanding how taxes affect investment and financial decisions, impacting the overall cost or benefits of these decisions.

Restrictive Covenants

Clauses in contracts that limit certain actions of the parties involved, often used in employment contracts and loan agreements to protect business interests.