machine works. using the code letters below, insert in the space before each item the letter where the…

machine works. using the code letters below, insert in the space before each item the letter where the amount would be located or otherwise treated in the bank reconciliation process. code located or treated a add to the cash balance per books b deduct from the cash balance per books c add to the cash balance per bank d deduct from the cash balance per bank e does not affect the bank reconciliation b 1. included with the bank statement materials was a check from joe terrell for $40 stamped \account closed\. 2. a personal deposit by ron carrinton to his personal account in the amount of $300 for dividends on his general electric common stock was credited to the company account. 3. the bank statement included a debit memorandum for $22.00 for four books of blank checks for acme machine works. 4. the bank statement contains a credit memorandum for $42.75 interest on the average checking account balance. 5. the daily deposits of march 30 and march 31 for $3,362 and $3,125, respectively, were included in the bank statement postings. 6. two checks totaling $316.86, which were outstanding at the end of february, cleared in march and were returned with the march statement. 7. the bank statement included a credit memorandum dated march 28, 2025 for $62.00 for monthly interest on a 6 - month, $15,000 certificate of deposit that the company owns. 8. four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during march. 9. on march 24, 2025, the bank collected a $3,400, 3 - month note from tom jacobs. a credit memorandum dated march 29, 2025 indicated the collection of the note and $102 of interest. 10. the bank statement included a debit memorandum for $20.00 for the collection service on the above note and interest.

machine works. using the code letters below, insert in the space before each item the letter where the amount would be located or otherwise treated in the bank reconciliation process. code located or treated a add to the cash balance per books b deduct from the cash balance per books c add to the cash balance per bank d deduct from the cash balance per bank e does not affect the bank reconciliation b 1. included with the bank statement materials was a check from joe terrell for $40 stamped \account closed\. 2. a personal deposit by ron carrinton to his personal account in the amount of $300 for dividends on his general electric common stock was credited to the company account. 3. the bank statement included a debit memorandum for $22.00 for four books of blank checks for acme machine works. 4. the bank statement contains a credit memorandum for $42.75 interest on the average checking account balance. 5. the daily deposits of march 30 and march 31 for $3,362 and $3,125, respectively, were included in the bank statement postings. 6. two checks totaling $316.86, which were outstanding at the end of february, cleared in march and were returned with the march statement. 7. the bank statement included a credit memorandum dated march 28, 2025 for $62.00 for monthly interest on a 6 - month, $15,000 certificate of deposit that the company owns. 8. four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during march. 9. on march 24, 2025, the bank collected a $3,400, 3 - month note from tom jacobs. a credit memorandum dated march 29, 2025 indicated the collection of the note and $102 of interest. 10. the bank statement included a debit memorandum for $20.00 for the collection service on the above note and interest.

Answer

Explanation:

Step1: Analyze item 1

A returned - "account closed" check is a bad check. It should be deducted from the cash balance per books. So the code is B.

Step2: Analyze item 2

A personal deposit credited to the company account is an error. It should be deducted from the cash balance per books. So the code is B.

Step3: Analyze item 3

A debit memorandum for blank checks is a bank - service charge. It should be deducted from the cash balance per books. So the code is B.

Step4: Analyze item 4

Interest on the average checking account balance is income for the company. It should be added to the cash balance per books. So the code is A.

Step5: Analyze item 5

Deposits included in bank statement postings are already accounted for in the bank balance. It does not affect the bank - reconciliation adjustment for the books. So the code is E.

Step6: Analyze item 6

Outstanding checks that cleared are already accounted for in the books. It does not affect the bank - reconciliation adjustment for the books. So the code is E.

Step7: Analyze item 7

Interest on a certificate of deposit is income for the company. It should be added to the cash balance per books. So the code is A.

Step8: Analyze item 8

Outstanding checks should be deducted from the cash balance per bank. So the code is D.

Step9: Analyze item 9

Collection of a note and interest by the bank is income for the company. It should be added to the cash balance per books. So the code is A.

Step10: Analyze item 10

A collection - service charge is a bank - service charge. It should be deducted from the cash balance per books. So the code is B.

Answer:

  1. B
  2. B
  3. B
  4. A
  5. E
  6. E
  7. A
  8. D
  9. A
  10. B