Please explain why the correct answer is correct

A bank reconciliation reconciles the bank statement with the company's:

Correct Answer:

B. Cash account in the balance sheet.

A corporation received $2,000 for interest earned on a note for a loan made to an employee in the current year. How would this transaction be recorded and what type of activity would this be classified under?

Selected Answer:	C. Debit Accounts Receivable $2,000, credit Interest Revenue $2,000; Financing
Correct Answer:	A. Debit Cash $2,000, credit Interest Revenue $2,000; Operating

Callahan Corporation provides services to customers on account, $900. How would this transaction be recorded?

Selected Answer:	B. Debit Service Revenue $900, credit Accounts Payable $900.
Correct Answer:	C. Debit Accounts Receivable $900, credit Service Revenue $900.

The primary purpose of closing entries is to:

Selected Answer:	B. Prove the equality of the debit and credit entries in the general journal.
Correct Answer:	A. To bring the Balance Sheet Equation into Balance and prepare the temporary accounts for accumulating the results of the following year's operations and payment of dividends.

Consider the following transactions. Based on the Accrual-Basis of Accounting place an X in the column that each transaction would record as Revenue or Expense or Neither. Then enter the totals below

	Accrual-Basis
Transaction	Revenue	Expense	Neither
1. Record employees' salaries incurred in current month but not yet paid, $800.
2. Paid for advertising placed in local newspaper last month $700.
3. Received bill for utilities used the current month that will not be paid until next month, $750.
4. Receive cash from customers in advance, $1,500.
5. Purchase office supplies on account, $400.
6. Paid dividends to stockholders, $200.
7. Used up supplies previously purchased on account, $400.
8. Used up on month of insurance on one-year policy that cost $3,600.
9. Receive cash from customers for services performed in the current period, $1,800.
10. Provide services to customers on account, $2,100.

Choose the number of the transactions correctly recorded as Revenue, Expense or Neither?

Correct Answer:

A.

Revenue	Expense	Neither
2	4	4

A deposit outstanding will cause the bank's cash balance to be higher than the company's cash balance.

Correct Answer:

False