Following the Completion of the Bank Reconciliation, an Adjusting Entry

question 131

Multiple Choice

Following the completion of the bank reconciliation, an adjusting entry was made that debited cash and credited Interest Revenue. Therefore the bank reconciliation must have included an item that was

• A) deducted from the balance per company's records
• B) deducted from the balance per bank statement
• C) added to the balance per bank statement
• D) added to the balance per company's records

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Definitions:

Discretionary Fixed Costs

Discretionary fixed costs are fixed expenses that can be adjusted or eliminated without directly impacting the short-term productivity of the business, such as advertising or research and development costs.

High-Low Method

An accounting technique used to estimate the variable and fixed components of a company's costs, based on the highest and lowest levels of activity.

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Non-Manufacturing Costs

Expenses that are not directly related to the production of goods, including selling, general, and administrative expenses.