Kathryn's Account Is Not in Overdraft

question 4

Multiple Choice

Kathryn's account is not in overdraft.When preparing the bank reconciliation she found that the bank had incorrectly debited her account with $120.The proper procedure is to:

• A)Deduct $120 from the bank balance in the general ledger and notify the bank
• B)Deduct $120 from the bank balance in the general ledger
• C)Add $120 to the bank statement balance in the bank reconciliation and notify the bank
• D)Do nothing as the bank will adjust the error when it balances.

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Definitions:

Transferred-In Materials

The costs of materials that were processed in a prior production department and then moved to a subsequent process or department.

Process Cost Accounting

A method of accounting used in manufacturing environments to allocate costs to products based on the processes they go through.

Cost Concept

An accounting principle that dictates all goods and services purchased are recorded at their original purchase cost.

Accounting Records

Documentation and books used to prepare financial statements and track financial transactions.