What was found
AT FL320, ATC REPORTED TRANSPONDER INDICATED FL 310 . TRANSPONDER WAS SET TO LEFT AT THE REPORT. CHANGED TRANSPONDER TO RIGHT AND ATC REPORTED IT TO BE CORRECT. TROUBLESHOT IAW FIM 34-53-00 FT 803, FIG 103. PERFORMED A LEFT ATC SYSTEM BITE. TEST PASSED. ACFT OK FOR SERVICE.