Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the left of each item.
-Cheque for $320 correctly written and paid by the bank but incorrectly entered in the cash payments journal for $230
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

Question

Quizplus · Accepted Answer

The error in the cash payments journal means the books show $90 more than what was actually paid, so $90 should be deducted from the cash balance per books to correct this.

Using the Code Letters Below, Indicate How Each of the Items