Multiple choice

The salary of Rs. 10,000 is paid by cheque, but is entered on the credit side of bank column by Rs. 1, 00,000 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 cash book?

  1. Rs. 90,000 is to be entered in the debit side of bank column.

  2. Rs. 90,000 is to be entered in the credit side of bank column.

  3. Rs. 90,000 is to be entered in the debit side of bank column and Rs. 90,000 is to be entered in the credit side of cash column.

  4. Rs. 90,000 is to be entered in debit side of cash column.
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A Correct answer
Explanation

This is correct. The salary is paid by cheque of Rs. 10,000. Hence, it would decrease the bank balance by Rs. 10,000. Thus, Rs. 10,000 is to be entered in the credit side of bank column, but Rs.1, 00,000 is entered in the credit side. Therefore, Rs. 90,000 is entered in excess in the credit side (Rs. 1, 00,000 - Rs. 10,000 Rs. = 90,000). So, Rs. 90,000 is to be entered in the debit side to rectify the mistake made.

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