Accompanying the Bank Statement Was a Credit Memo for a Short-Term

question 164

Multiple Choice

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

• A) debit Notes Receivable; credit Cash
• B) debit Cash; credit Miscellaneous Income
• C) debit Cash; credit Notes Receivable
• D) debit Accounts Receivable; credit Cash

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Definitions:

Business Case

A documented argument or rationale for initiating a project or task, outlining the benefits, costs, and risks.

Breakeven Analysis

Breakeven analysis is a financial evaluation to determine the point at which a business, product, or service becomes profitable, balancing costs with revenue.

NPV

Net Present Value, a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

ROI

Short for Return on Investment, a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several investments.