Which of the Following Is a CORRECT Statement Regarding the Bank

question 151

Multiple Choice

Which of the following is a CORRECT statement regarding the bank reconciliation?

• A)The bank reconciliation is part of the general ledger.
• B)Journal entries need to be made for all transactions on the bank side to get the accounts up-to-date.
• C)Journal entries need to be made for all transactions on the book side to get the accounts up-to-date.
• D)The bank reconciliation is part of the journal.

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Definitions:

Amortized

Relates to spreading payments over multiple periods to gradually eliminate a liability or loan, incorporating both principal and interest components.

Compounded Semiannually

The calculation of interest where the interest earned over a period is added to the principal, and the process is repeated twice a year.

Gross Debt Service Ratio

A financial ratio that compares an individual's monthly housing costs (including mortgage payments, property taxes, and utilities) to their gross monthly income, used by lenders to assess borrowing capacity.

Gross Monthly Income

The total amount of income earned in a month before taxes and deductions.