1. What does bank reconciliation mean?

1. A comparison of the check stubs with the bank statement
2. The difference between the pass book and the receipts not deposited
3. The subtraction of outstanding checks from the bank statement to agree with the cash balance
4. The addition of bank balance and the checks not returned

2. When should adjusting entries be made?

1. On the first day of the fiscal year
2. At the midpoint of the fiscal year
3. On the last day of the fiscal year
4. At any time during the fiscal year when accounts are posted

3. If a company buys a patent on an article but does not manufacture the article, what should the cost of the patent be?

1. Capitalized and written off over its life
2. Treated as a current business expense
3. Entered in the notes receivable ledger
4. Credited to capital surplus