PRC-1 · Chapter 9 · Question 43 of 100
A business mistakenly recorded a deposit of Rs. 3,500 on the payment (credit) side of the cash book. To correct this, the accountant should:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit the cash book with Rs. 7,000.
Explanation
To fix the error, the cash book requires a debit of Rs. 3,500 to cancel the wrong credit, and another debit of Rs. 3,500 to record the actual deposit, making a total debit of Rs. 7,000.
More Bank Reconciliations MCQs
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- Q49What is the correct journal entry for a bank charge of Rs. 500 recorded in the bank statement but missed in the cash book?