PRC-1 · Chapter 9 · Question 20 of 100
When preparing an adjusted cash book, which of the following will decrease the cash book balance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Dishonour of a cheque previously received from a customer.
Explanation
A dishonoured cheque means the funds previously assumed to be received and debited are invalid. The entry must be reversed by crediting the cash book, which decreases the balance.
More Bank Reconciliations MCQs
- Q22Which of the following is NOT a cause for a difference between the cash book and bank statement balances?
- 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: