Chapter 12, BANKING CODES - Sage 50

Question 1

A (Adjustment)

Answer 1

for transactions posted as adjustments to a bank account.

Question 2

C (Cleared)

Answer 2

Items (matched deposits with depositor cheques) that are recorded in your General Ledger bank account & that have been processed by the bank (on the bank statement)

Question 3

D (Deposit Error)

Answer 3

is used for deposits that are recorded in your General Ledger bank account but which differ from the bank statement.

The difference must be recorded with a journal entry & assigned the Deposit Error code.

When both D codes are entered, they can be cleared together with a C (cleared) code.

Question 4

N (NSF)

Answer 4

Means Not Sufficient Funds.

Cheques returned by the bank to the depositor when there is not enough money in the customer’s bank account.

Question 5

P (Payment Error)

Answer 5

is used for cheques that are recorded in your General Ledger bank account but which differ from the bank statement.

The difference must be recorded with a journal entry & assigned the Payment Error code.

When both P codes are entered, they can be cleared with the C code.

The original cheque, coded as P, & the error correction, coded as a P, can be cleared together with a C (Cleared) code.

Question 6

R (Reversed)

Answer 6

When a cheque is received by the bank as a deposit, it is entered as a credit on the depositor’s bank statement.

When the cheque is cancelled (usually because of NSF), the entry in the depositor’s bank statement is reversed, so the entry is assigned the R (Reversed) code. The reversing entry is normally recorded in the company’s Sales Journal.

A reversing entry is required & is then assigned the A (Adjustment) code.

Question 7

V (Void)

Answer 7

is used to identify cheques that were cancelled because they were issued incorrectly.

A reversing entry is required & is then assigned the A (Adjustment) code.