Bank Reconciliation 1. Classifying bank reconciliation items The following items could appear on a bank reconciliation:

a. Outstanding cheques, $670.

b. Deposits in transit, $1,500.

c. Dishonoured cheques from customers, #548 for $175.

d. Bank collection of bill receivable of $800 and interest of $80.

e. Interest earned on bank balance, $20.

f. Service charge, $10.

g. Book error: cash was credited with $200. The correct amount was $2,000.

h. Bank error: the bank decreased the entitys account by $350 for a cheque written by another customer.

i. Outstanding cheques from the previous month that are still outstanding.

j. EFT payment by a customer.

k. Bank error in recording a deposit for $464 should have been $446.

Required: a. Classify each item as (1) an addition to the book balance, (2) a subtraction from the book balance, (3) an addition to the bank balance, or (4) a subtraction from the bank balance.

b. Indicate (i) the items that will result in an adjustment to the company's records, and (ii) why the other items do not require an adjustment.