Recently, a group of university students decided to incorporate for the purposes of selling a process to recycle the waste product from manufacturing cheese. Some of the initial costs involved were legal fees and office expenses incurred in starting the business, state incorporation fees, and stamp taxes. One student wishes to charge these costs against revenue in the current period. Another wishes to defer these costs and amortize them in the future. Which student is correct

The student wishing to defer these costs and amortize them in the future.

Explanation:

Indeed, according to standard regulatory requirements, all the initial costs associated with incorporating a business cannot be deducted all at once in the first year of operation.

However, these costs are spread over a long period of time. And one way to do this is to amortize them in the future. Therefore, the second student deferring cost is correct.

The bank reconciliation is an internal document that verifies the accuracy of records maintained by the depositor and the financial institution.

Explanation:

The balance on the bank statement is adjusted for outstanding checks and uncleared deposits. The record balance is adjusted for service charges and interest earned.