A credit memorandum on a bank statement indicates:
A)An increase in the bank's asset account.
B)A decrease in the bank's asset account.
C)A decrease in the bank's liability account.
D)An increase in the bank's liability account.
E)An increase in the bank's expense account.

Question

Quizplus · Accepted Answer

A credit memorandum on a bank statement indicates an increase in the bank's liability account. This is because when a bank issues a credit memorandum, it is acknowledging an increase in the depositor's balance, which, from the bank's perspective, is a liability.

A Credit Memorandum on a Bank Statement Indicates