If a Bank Statement Includes an EFT Receipt of $200

question 39

Multiple Choice

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

• A)debit to Cash for $200 and a credit to Interest Revenue for $200.
• B)debit to Accounts Receivable for $200 and a credit to Interest Revenue for $200.
• C)debit to Interest Revenue for $200 and credit to Cash for $200.
• D)debit to Interest Expense for $200 and credit to Prepaid Interest for $200.

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Definitions:

Journal Entry

A journal entry is a record in the accounting books that logs a business transaction, indicating the accounts and amounts to be debited and credited.

Inventory

The total amount of goods and materials held by a business for the purpose of resale or production.

Selling Expense

Costs incurred directly and indirectly in making sales, including advertising, shipping, and sales staff salaries.

Goods Sold

The total of merchandise that a company has sold to its customers within a specific period; often referred to as 'sales'.