Question :

Using the code letters below, show how each of the items listed could be handled in preparing bank reconciliation.

Code

A Add to cash balance per books

B Deduct from cash balance per books

C Add to cash balance per bank

D Deduct from cash balance per bank

E Does not affect the bank reconciliation

Items

1. Outstanding checks ACDEB

2. Bank service charge ABDEC

3. Check for $320 properly written and paid by the bank but mistakenly entered in the cash payments journal for $230 AEDBC

4. Deposit in transit BCAED

5. Bank returns customer deposited check marked NSF DCEAB

6. Bank collects notes interest and receivable for depositor CBDEA

7. Bank debit memorandum for check printing fees EDABC

8. Petty cash custodian has $86 in paid petty cash vouchers that have not been reimbursed. BEDAC

9. Bank charged a check against the company, which should have been charged to other company. EDACB

10. A check for $236 was properly paid by the bank but was wrongly entered in the cash payments journal for $263