In preparing a bank reconciliation, a firm must show that the adjusted bank balance equals the...
In preparing a bank reconciliation, a firm must show that the adjusted bank balance equals the adjusted book balance. If the original book balance is $1,700 and there is $50 of interest received from the bank, $100 of EFT (electronic funds transfer into the account), and an insufficient funds check of $30 issued by the company, then what is the adjusted book balance?
$1,820
$1,880
$1,620
Not able to be determined from the facts
In preparing a bank reconciliation, a firm must show that the adjusted bank balance equals the adjusted book balance. If the original bank balance is $1,500 and there is $200 of outstanding checks and $300 of deposits in transit, then what is the adjusted bank balance?
$1,000
$1,600
$1,300
Not able to be determined from the facts
A high gross profit percentage indicates
means that the company is earning more gross profit than net income
means that the company has earned profit from operations than other companies in the same industry
means that the company is collecting a high portion of it's receivables in cash (that is coming from inventory sales)
means that the company is selling products for a greater markup over its cost.
FOB Shipping Point indicates that the seller
Must record revenue when the goods arrive at the shipping department
Must record revenue when the goods leave the shipping department
Must record expenses when the goods arrive at the shipping department
Must record a reduction in equity when the goods arrive at the shipping department
Homework Answers
Solution 1:
Adjusted book balance = Original book balance + Interest received + EFT - NSF Check
= $1,700 + $50 + $100 - $30 = $1,820
Hence first option is correct.
Solution 2:
Adjusted bank balance = Original bank balance + Deposit in transit - Outstanding checks = $1,500 + $300 - $200 = $1,600
Hence 2nd option is correct.
Solution 3:
A high gross profit percentage indicates "means that the company is selling products for a greater markup over its cost."
Hence last option is correct.
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