PRC-1 · Chapter 9 · Question 69 of 100
The bank incorrectly debited the business's account by Rs. 5,000 for a cheque drawn by another company. How should this be handled when preparing a Bank Reconciliation Statement starting with the cash book balance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Deduct Rs. 5,000 in the BRS
Explanation
The bank erroneously reduced its balance. To reconcile from the correct cash book balance to the erroneous bank statement balance, you must mimic the bank's error by deducting Rs. 5,000 in the BRS.
More Bank Reconciliations MCQs
- Q71Which of the following is the standard formula to reconcile a favorable cash book balance to the bank statement balance?
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