PRC-1 · Chapter 2 · Question 68 of 100
What happens if an error in a source document is transferred into a book of prime entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The error will carry through to the ledger accounts, as books of prime entry summarize data directly for ledger posting.
Explanation
If the original entry is wrong (error of original entry), the incorrect amounts will be posted to both the debit and credit sides of the ledgers. The trial balance will still balance, masking the error.
More Books of Prime Entry MCQs
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- Q71What is the key difference between a trade discount and a settlement (cash) discount in terms of books of prime entry?
- Q72'Falcon Security' pays its employees' monthly salaries total of Rs. 800,000 via direct bank transfer. Which book of prime entry captures…
- Q73A business agrees to offset a customer's debit balance of Rs. 8,000 against a credit balance of Rs. 12,000 owed to the same party in the…
- Q74In a manual accounting environment, how often are the totals from the Sales Day Book typically posted to the general ledger?