A Bank Reconciliation Should Be Prepared Periodically Because

question 6

Multiple Choice

A bank reconciliation should be prepared periodically because

• A) the company's records and the bank's records are in agreement
• B) the bank has not recorded all of its transactions
• C) any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected
• D) the bank must make sure that its records are correct

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Definitions:

Term

In finance, it refers to the period of time until a loan matures; in a broader sense, it can describe any specific duration or the definition of a concept or agreement.

Receivable

Money owed to a company by its customers or clients for goods or services delivered or used but not yet paid for.

Direct Write-Off Method

An accounting method where uncollectable accounts receivable are directly written off against income at the time they are deemed irrecoverable.

Adjusting Entry

An Adjusting Entry is a journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period, ensuring that the financial statements reflect accurate and fair values.