Multiple choice

Cheque of Rs. 20,000 was issued to our customer, but only Rs. 2,000 is entered in the Two - Columnar Cash Book. How to rectify this mistake in the Two - Columnar Cash Book, assuming that the entry is made in the correct side of the Cash Book?

  1. Rs. 18,000 is entered in the credit side of bank column.

  2. Rs. 20,000 is entered in the credit side of bank column.

  3. Rs. 18,000 is to be entered in the debit side of bank column.

  4. Rs. 18,000 is entered in the credit side of cash column.
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A Correct answer
Explanation

This is correct. The cheque of Rs. 20,000 is issued and hence our bank balance would be decreased by Rs. 20,000. So, we have to enter Rs. 20,000 in the credit side of bank column, but only Rs. 2,000 is entered in credit side of the bank column. Further Rs. 18,000 is to be entered in the credit side of bank column (Rs. 20,000 - Rs. 2,000).

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