A check was written by a business for $507 but was recorded in the journal as $705. How would this error be included on the bank reconciliation?

Which of the following is a correct statement regarding "coverage ratio?"

a) It measures how much of a company's revenue, as it travels down the "waterfall," is available to pay interest relative to the amount of interest that must be paid. b) All else the same, a higher ratio makes creditors feel more secure that they will be paid. c) The more volatile the industry that the company is in, the higher the coverage ratio necessary for creditors to feel a certain amount of security. d) All of the above

On January 1, Year 1, Needham, Inc., borrowed $10,000 at 6% for four years. On December 31, Year 1, Needham made its first installment payment of $2,886. Show the effect of the first installment payment on the accounting equation. Round the amounts to the nearest dollar. What is liability?

A. (2,286) Cash B. (600) Notes Payable C. (2,886) Notes Payable D. (600) Cash E. (2,886) Interest Expense F. (2,886) Cash G. (2,286) Notes Payable H. (600) Interest Expense I. 0 No Effect