Multiple choice

Interest on securities collected by our bank is of Rs. 3,230 but is entered in debit side of cash column as Rs. 3,320. How will you rectify this error in the cash book?

  1. Rs. 3,320 is to be entered in the credit side of cash column and Rs. 3,230 is to be entered in the debit side of bank column.

  2. Rs. 3,320 is to be entered in credit side of cash column only.

  3. Rs. 3,230 is to be entered in debit side of bank column only.

  4. None of these
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A Correct answer
Explanation

This is correct. The interest on securities collected by bank is of Rs. 3,230. Hence, the bank balance would be enhanced by it and is to be entered in the debit side of bank column. But instead of that, Rs. 3,320 is entered in debit side of cash column. Therefore, Rs. 3,320 entered in debit side of cash column by mistake is to be entered in the credit side of cash column to nullify it. Rs. 3,230, which is not entered before in the debit side of bank column would be entered in its debit side now.

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