Accompanying the Bank Statement Was a Debit Memo for Bank

question 81

Multiple Choice

Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?

• A) debit Miscellaneous Administrative Expense; credit Cash
• B) debit Cash; credit Other Income
• C) debit Cash; credit Accounts Payable
• D) debit Accounts Payable; credit Cash

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Definitions:

Annual Net Cash Flows

The total amount of money that flows into and out of a business over a year, after all revenues are collected and expenses are paid.

Marginal Tax Rate

The rate at which an additional dollar of income is taxed, indicating the tax impact on your next dollar earned.

Depreciation

The accounting method of allocating the cost of a tangible or physical asset over its useful life.

Net Investment

The difference between total investments and the depreciation on those investments over a period, representing the increase in value of an asset.