Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

A bank may issue a credit memorandum for which of the following transactions?

Payment of a customer's check that was previously deposited

Service charges deducted from the depositor's account

Collection of a note receivable on behalf of the depositor

Dishonoring a note receivable

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Verified step by step guidance

Understand the concept of a credit memorandum: A credit memorandum is issued by a bank to notify the depositor of an increase in their account balance. This typically occurs when the bank collects funds on behalf of the depositor or makes adjustments that increase the account balance.

Analyze the transactions listed in the problem: Payment of a customer's check that was previously deposited, service charges deducted from the depositor's account, collection of a note receivable on behalf of the depositor, and dishonoring a note receivable.

Determine which transaction results in an increase in the depositor's account balance: Payment of a customer's check and service charges reduce the account balance, while dishonoring a note receivable does not increase the balance. Collection of a note receivable on behalf of the depositor increases the account balance.

Conclude that the bank issues a credit memorandum for the collection of a note receivable on behalf of the depositor, as this transaction increases the depositor's account balance.

Review the reasoning: A credit memorandum is issued for transactions that increase the account balance, and among the options provided, only the collection of a note receivable fits this criterion.