The Bank Statement of Mellon Company Shows an Overdraft of $10

Multiple Choice

The bank statement of Mellon Company shows an overdraft of $10 000 at 28 February. In reconciling the account at that date indicate how the company will treat cheque no. 4500 for $80 that was drawn on 25 February but had not yet been presented for payment.

A) Record in the cash receipts journal.
B) Record in the cash payments journal.
C) Add to the bank statement balance in the bank reconciliation.
D) Subtract from the bank statement balance in the bank reconciliation.