PRC-1 · Chapter 9 · Question 85 of 100
A payment of Rs. 800 was incorrectly recorded as Rs. 8,000 in the cash book. What is the correct adjusting entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit the cash book by Rs. 7,200
Explanation
The payment (credit) was overstated by Rs. 7,200 (8,000 - 800). To restore the excess funds incorrectly deducted, the cash book must be debited by Rs. 7,200.
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