PRC-1 · Chapter 2 · Question 94 of 100
If a cheque payment to a supplier is recorded correctly in the cash book, but the supplier later informs the business they destroyed the cheque by accident without cashing it. Which book of prime entry is used to correct the company's records?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Cash Book
Explanation
The original payment was recorded in the cash book. To cancel this payment because the cheque will never clear, an equal amount must be entered on the receipt (debit) side of the cash book.
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