The Bank Statement for Ronson Company Included a Debit Memo

question 88

Essay

The bank statement for Ronson Company included a debit memo for a bank service charge of $58.
Required:
a)Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided.Include dollar amounts of increases and decreases; for cash flow,indicate whether it is an operating activity,investing activity,or financing activity. b)Is the recognition of the bank service charge an asset source,use,or exchange transaction?

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Definitions:

Right of Disaffirmation

A legal right allowing minors to void contracts they have entered into, based on their incapacity to fully understand the terms.

Ratified

Formally approved or confirmed, often in the context of treaties, contracts, or legislative acts.

Promissory Note

A written, legally binding document in which one party promises to pay another a definite sum of money either on demand or at a fixed future date.

Alcohol-Related Incapacity

A state of being unable to function or make decisions due to excessive consumption of alcohol.