ICAEW AF · Chapter 5 · Question 5 of 9
A cheque payment to a supplier for £472 was correctly shown on the bank statement but was recorded in the cash book as £427. What adjustment is needed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Credit the cash book with £45
Explanation
The cash book shows a payment £45 lower than the amount actually paid (£472 - £427 = £45). The cash book is wrong, not the bank, so the cash book must be corrected by recording an additional payment of £45, which is a credit entry. The other side of the entry increases the debit to the supplier's account.
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