If a Bank Statement Includes an EFT Receipt of $200

question 139

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.
• B) debit to Accounts Receivable for $200.
• C) credit to Cash for $200.
• D) credit to Prepaid Interest for $200.

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Definitions:

ERISA

The Employee Retirement Income Security Act, a federal law that sets standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Bilateral Amputee

An individual who has lost or is missing both arms or both legs, typically as a result of trauma, disease, or congenital conditions.

Risk-based Insurance

Insurance policies where premiums vary according to the risk level of the policyholder, commonly used in health and auto insurance.

Americans with Disabilities Act

A legal statute designed to prevent discrimination towards people with disabilities in various public sectors.