The following data were obtained from the bank statement and from the process of reconciling the bank balance with the company's cash balance:
Bank service charges $ 20
Deposit outstanding $ 150
Interest earned on the bank account $ 10
Checks outstanding $ 400
Which items should be deducted from and added to the bank balance in completing the reconciliation?
A) Deduct checks outstanding; add service charges and deposit outstanding.
B) Deduct interest earned; add deposit outstanding.
C) Deduct checks outstanding; add deposit outstanding.
D) Deduct deposit outstanding; add checks outstanding.
Answer: Deduct checks outstanding; add deposit outstanding.
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