A Bank Reconciliation Included an Outstanding Check of $850 for the Payment

question 65

Multiple Choice

A bank reconciliation included an outstanding check of $850 for the payment of salaries.The journal entry to record this reconciling item:

• A)should debit Salaries Expense and credit Cash for $850.
• B)should debit Cash and credit Salaries Expense for $850.
• C)should debit Accounts Payable and credit Cash for $850.
• D)is not required.

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Definitions:

Common Stock

Shares that constitute ownership in a corporation, providing voting rights and entitling shareholders to a portion of the company’s profits through dividends.

Cash Dividend

A payment made by a company to its shareholders, usually in cash, out of its profits or reserves.

Bond Payable

A long-term debt instrument issued by corporations and governments, promising to pay the bondholder a specified sum of money at future dates.

Indirect Method

A method often used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions and changes in working capital.