Multiple choice

Purchase of Rs. 1,870 by cheques has been wrongly posted in the cashbook as Rs. 1,780. This has the effect of

  1. increasing the bank balance and undervaluation of stock consumed by Rs. 90.

  2. decreasing the bank balance and stock consumed by Rs. 90

  3. increasing the bank balance and stock consumed by Rs. 180

  4. decreasing the bank balance and stock consumed by Rs. 180
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Since purchase account is underdebited and bank account is undercredited, so (1) is the correct answer.

Keep practicing — related questions