PRC-1 · Chapter 9 · Question 56 of 100
A receipt of Rs. 7,500 was overstated as Rs. 8,500 in the cash book. Which of the following entries is required to correct this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Credit the cash book by Rs. 1,000
Explanation
The receipt (debit) was overstated by Rs. 1,000, making the balance artificially high. To correct this, a credit entry of Rs. 1,000 is required in the cash book.
More Bank Reconciliations MCQs
- Q58A payment of Rs. 1,200 was understated as Rs. 200 in the cash book. Which of the following actions is required?
- Q59A bank statement shows a credit (favorable) balance of Rs. 45,200. Outstanding (unpresented) cheques are Rs. 11,500, and uncleared…
- Q60If the receipt side of the cash book is found to be under-casted, what is the correcting entry in the cash book?
- Q61If the payment side of the cash book is found to be under-casted, what is the correcting entry in the cash book?
- Q62A time-barred (stale) cheque of Rs. 145,540, previously issued to a supplier 8 months ago, is discovered. How should it be treated?