PRC-1 · Chapter 9 · Question 58 of 100
A payment of Rs. 1,200 was understated as Rs. 200 in the cash book. Which of the following actions is required?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Credit the cash book by Rs. 1,000
Explanation
If a payment is understated, the cash book hasn't been reduced enough. An additional credit entry of Rs. 1,000 is required to reflect the full payment.
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