Fact Pattern 22-2

question 42

Multiple Choice

Fact Pattern 22-2
Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac?count at First National Bank.
-Refer to Fact Pattern 22-2. Digital's bank is

• A) the cashing bank.
• B) the depositary bank.
• C) the intermediary bank.
• D) the payor bank.

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Definitions:

High-low Method

A technique used in managerial accounting to estimate variable and fixed cost components of a cost by analyzing the highest and lowest activity levels.

Electrical Cost

Electrical cost refers to the expenses incurred from the use of electricity, often a significant component of utility costs for homes and businesses.

Machine-hour

A measure of the amount of time a machine is run, often used as a basis for allocating manufacturing overhead to products.

High-low Method

A technique used in cost accounting to estimate fixed and variable costs associated with production by using the highest and lowest levels of activity.