PRC-1 · Chapter 9 · Question 21 of 100
A cheque of Rs. 45,000 received from a customer was deposited but returned unpaid by the bank due to insufficient funds. What is the correct double entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Receivables Rs. 45,000, Credit Bank Rs. 45,000
Explanation
The bank balance must be reduced (Credit Bank), and the customer's liability to the business is reinstated (Debit Receivables).
More Bank Reconciliations MCQs
- Q23A cheque issued to a supplier for Rs. 5,000 was recorded in the cash book but completely omitted from the bank statement up to the period…
- Q24The payment side of the cash book was under-casted by Rs. 2,000. To correct this error, the accountant must:
- Q25The receipt side of the cash book was over-casted by Rs. 1,500. To correct this error, the accountant must:
- Q26If bank charges were mistakenly recorded twice in the cash book, the unadjusted cash book balance would be:
- Q27To correct the error of recording bank charges twice in the cash book, the entity should: