Question

BE7.9 (L03), C Lake Roye is uncertain about the control features of a bank account. Explain the control benefits of (a) a checking account and (b) a bank statement. Identify the control features of a bank account. BE7.10 (LO 3), C The following reconciling items are applicable to the bank reconciliation for Forde Co. Indicate how each item should be shown on a bank reconciliation. Indicate location of reconciling items in a bank reconciliation. a. Outstanding checks. b. Bank debit memorandum for service charge. c. Bank credit memorandum for collecting from customer an electronic funds transfer. d. Deposit in transit. BE7.11 (L03), C Using the data in BE.1o, indicate (a) the items that will result in an adjustment to the depositor's records and (b) why the other items do not require adjustment. Identify reconciling items that require adjusting entries.

All three E7.9, E7.10, and E7.11 please.

Answer 1

E 7.9

a) Checking Account
1	It is more safe to take checks or your debit card around with you, rather than cash.
2	Funds in your checking account are insured up to limits set by the FDIC.
3	A canceled check is proof you paid a bill.
b) Bank Statement
1	It helps in tracking accounts recievable status
2	It helps in Detecting frauds and errors , i.e and amount paid to wrong person or wrong amount.
3	It helps in Preventing Overdrafts by managing the payments to be made or received

E 7.10

A) Outstanding CHecks will be added in Bank reconciliation

b) SHould be reduced in Bank reconciliation

c) Should be added in Bnak reconciliation

d) SHould be reduced from Bank reconciliation

E7.11

a) a,b,c will require adjustment

b) d will not require and Cash has been already sent and is in transit to be deposited , and as soon as it will be deposited , Banks's balance will be same as balance as per books