Question

Mr. X had two accounts, one current account and another saving bank A/c in a nationalized bank. He drew a cheque of $Rs.5,000$ on saving bank but credited to Current A/c in his cash book. Similarly a cheque of $Rs.2,000$ deposited in current A/c was debited to Saving Bank A/c. What would be effect of these errors in Bank pass books/ Bank statement of these two A/cs?

• A. Current A/c balance would be more by $Rs.3,000$ and saving A/c balance less by $Rs.3,000$ .
• B. Current A/c balance would be more by $Rs.2,000$ and saving A/c balance less by $Rs.5,000$ .
• C. Current A/c balance would be less by $Rs.5,000$ and saving A/c balance more by $Rs.2,000$ .
• D. Current A/c balance would be more by $Rs.5,000$ and saving A/c balance less by $Rs.2,000$ .

Answer 1

The correct option is A Current A/c balance would be more by $Rs.3,000$ and saving A/c balance less by $Rs.3,000$ .

• A cheque of $Rs.5000$ was wrongly credited to current a/c. in the cash instead of savings a/c. so the pass book balance of savings account would be less by $Rs.5000$ and the current account pass book balance would be more by $Rs.5000$.
• Now, in case of second cheque of $Rs.2000$ it, was deposited in current a/c. but was debited to savings a/c. so, the pass book balance of savings a/c. would be more by $Rs.2000$ and the current a/c. balnce in the pass book would be less by $Rs.2000$
• So , net effect of both these errors would be that the current a/c balance would be more by $Rs.3000$ and the savings a/c. balance would be less by $Rs.3000$