A Check Drawn by a Depositor for $295 in Payment

question 4

Multiple Choice

A check drawn by a depositor for $295 in payment of a liability was recorded in the depositor's book as $925.The $630 difference would be included on the bank reconciliation as a(n) :

• A)addition to the cash balance per books.
• B)addition to the cash balance per bank.
• C)deduction from the cash balance per bank.
• D)deduction from the cash balance per books.

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Definitions:

Surety

A financial guarantee by one party (the surety) to assume responsibility for the debt obligation of a borrower if that borrower defaults.

Principal Debtor

The primary individual or entity responsible for fulfilling the obligations of a debt or loan agreement.

Surety

A financial arrangement where a third party (surety) agrees to assume responsibility for the debt or obligation of another party if that party fails to meet their obligations.

Consideration

The value (such as money, services, or goods) promised in a contract which motivates a party to enter into the agreement.