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Question

A cheque of Rs 5,000 was issued to the supplier but it was recorded as Rs 500 in the bank column of the cash book. Due to this error the cash book will ___.


A

Overstate the balance of bank by Rs 4,500

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B

Understate the balance of bank by Rs 4,500

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C

Not be affected

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D

None of the above

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Solution

The correct option is A

Overstate the balance of bank by Rs 4,500


Due to this error the balance as per cash book will be more by Rs 4,500.


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