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:

Preferred Stock

A category of corporate equity that ranks above common stock in terms of claims on assets and income, typically receiving dividends at a fixed rate.

Annual Dividend

The total amount of dividend payments a company distributes to its shareholders over the course of a year.

Rate of Return

The upward or downward movement in an investment's worth over an agreed-upon duration, quantified as a percentage of the investment's original price.

Shares

Units of ownership interest in a corporation or financial asset that provide a proportionate claim on the company's profits and assets.