Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Question

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Answer 1

Question

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

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Students have asked these similar questions

Please give answer general accounting question

Cost account solution need

We note the following adjusted trial balance totals: Cash $ 21,000 Accounts Receivable $ 20,000 Allowance for Doubtful Accounts $2,000 Merchandise Inventory $ 20,000 Accounts Payable $16,000 Capital $ 3,000 Sales Sales Returns Cost of Goods Sold Other Expenses Gross profit is: a. $56,000 b. $50,000 c. $80,000 d. $74,000 $ 80,000 $ 6,000 $ 24,000 $ 10,000

Answer 2

Question

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

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Answer 3

Question

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

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Answer 4

Question

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

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Answer 5

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

Answer 6

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.

Conclusion

Hence, options (b), (c), (d), and (e) are incorrect, and the option (a) is the correct answer.

Answer 7

Chapter 8, Problem 1MCQ

To determine

Find the correct option, the option that explains the accounting treatment of customer’s note collected by bank.

Answer 8

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is option (a).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Justification for correct answer: Note receivable being collected by bank, is credited to bank account. But the company is not aware of it. So, while preparing bank reconciliation statement, company should add the amount to the cash balance per books. In the given case, bank collected $335 note and credited to the customer’s account, after deducting the collection charges of $15. So, bank would credit the difference of $320 ($335–$15) to the customer account, and the same would be added to the book balance. Hence, option (a) is the correct answer.