Reference no: EM132650508

Question 1: A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

Select one:

a. a deposited check returned for insufficient funds
b. collection of a note receivable for the company
c. a service charge
d. notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

Question 2: Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold was $24,500. Abbey Co. issued a credit memo for $3,600 for defective merchandise, which was not returned to Abbey. Gomez Co. paid the invoice within the discount period. What is the gross profit earned by Abbey Co. on these transactions?

Select one:

a. $10,500
b. $30,772
c. $6,272
d. $31,400

Question 3: Credit memos from the bank

Select one:

a. decrease a bank customer's account
b. are used to show a bank service charge
c. show that a company has deposited a customer's NSF check
d. show that the bank has collected a note receivable for the customer