In Reconciling a Bank Statement,the Bank Statement Balance Is $1,000

question 90

Multiple Choice

In reconciling a bank statement,the bank statement balance is $1,000 and the balance per books is $1,205.A bank service charge is $5; a deposit in transit totals $500; and outstanding checks total $300.The journal entry for a bank service charge would include

• A) debiting Cash and crediting Miscellaneous Expense.
• B) debiting Cash and crediting Owner's Capital.
• C) debiting Accounts Payable and crediting Cash.
• D) debiting Miscellaneous Expense and crediting Cash.

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Definitions:

Incremental Working Capital

The additional amount of net working capital that a company needs to invest in a project.

Opportunity Cost

The value of the best alternative that is foregone when a particular course of action is chosen.

Incremental Cash Flow

is the additional cash flow generated by a company from a new project or investment, used to analyze the profitability of taking on the new project.

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future business decisions.