In Preparing the Bank Reconciliation,certain Transactions Recorded by the Depositor

question 21

Multiple Choice

In preparing the bank reconciliation,certain transactions recorded by the depositor may not have been recorded by the bank.Which of the following is an example of this type of transaction?

• A)Service charges
• B)Outstanding checks
• C)Credit for interest earned
• D)Charges for NSF checks

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Definitions:

Fed

Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.

Externalities

Costs or benefits that affect parties who did not choose to incur that cost or benefit, often leading to market failure if unaddressed.

Moral Hazard

A situation in which one party engages in risky behavior or lacks incentive to guard against risk because another party bears the consequences.

Moral Hazard

The situation in which one party can take risks because they know that they will not have to bear the full consequences of their actions.