What adjustments are often necessary after the reconciliation of a bank account?
Adjustments are usually necessary because the dollar amount in the company's cash account may differ from the actual amount available to use. Items that cause this difference include bank service charges deducted from the company's bank account, interest earned added to the company's bank account, NSF checks returned with the bank statement, and other miscellaneous transfers that may not have been recorded in the company's accounting records.
You might also like to view...
Which of the following is not a disadvantage of using the direct write-off method for recording uncollectible accounts?
A) Increases the cost of record keeping B) violates the expense recognition principle C) allows manipulation of earnings D) overstates the net realizable value of receivables
If consolidated statements are presented for the first time instead of statements of several individual companies, this change should be accounted for
A) retrospectively. B) prospectively. C) by cumulative effect adjustment. D) by footnote disclosure only.
The personnel action form provides authorization control by
a. preventing paychecks for terminated employees b. verifying pay rates for employees c. informing payroll of new hires d. all of the above
DyEnergy Corporation has correctly computed its economic order quantity at 5,000 units. However, the management feels it would rather order in quantities of 4,000 units in order to reduce inventory holding risks. How should ' the firm's total annual purchase order cost and total annual carrying cost for an order quantity of 4,000 units compare to the respective amounts for an order quantity of
5,000 units? a. Lower purchase order cost and higher carrying cost b. Lower purchase order cost and lower carrying cost c. Higher purchase order cost and lower carrying cost d. Higher purchase order cost and higher carrying cost