Multiple choice

The proprietor introduces fresh capital of Rs. 20,000, but is debited in cash with Rs. 2,000 only. How will this mistake be rectified in the Two - Columnar Cash Book assuming that the entry is made in the correct side of Cash Book?

  1. Rs. 18,000 is to be entered in debit side of cash column.

  2. Rs.18,000 is to be entered in credit side of cash column.

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

  4. Rs. 20,000 is to be entered in the debit side of bank column.

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A Correct answer
Explanation

This is correct. The proprietor has introduced fresh capital of Rs. 20,000. Hence, cash would be increased by Rs. 20,000 and is to be entered in debit side of cash column as Rs. 20,000. But in the debit side of cash column, it is entered as Rs. 2,000 only as the entry is made in the correct side. Hence, further Rs. 18,000 would be entered in debit side of cash column (Rs. 20,000  -  Rs. 2,000 )