In the Normal Operation of Business You Receive a Check

question 27

Multiple Choice

In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $425 is "NSF". The bank also informs you that due to the amount of activity on your business account the monthly service charge is $45. During a bank reconciliation:

• A) subtract both values from balance according to bank.
• B) add both values from balance according to books.
• C) add both values from balance according to bank.
• D) subtract both values from balance according to books.

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Definitions:

Common Shares

A type of equity security that represents ownership in a corporation, giving the holder voting rights and a share in the company's profits via dividends.

Authorized

Officially approved or sanctioned, often referring to a specified amount of capital stock a corporation is legally permitted to issue.

Issued

In finance, issued refers to the process of making securities available for sale to the public or the specific quantity of securities that have been made available.

Market Value

The current price at which an asset or service can be bought or sold in the open market.