Question

The insurance premium paid is recorded as Rs 4,500 in cash book, however the same is shown as Rs 9,000 in passbook. What shall be the effect in BRS if starting point is cash book balance?

• A. Rs 9,000 shall be deducted from cash book balance
• B. Rs 9,000 shall be added to cash book balance
• C. Rs 4,500 shall be added to cash book balance
• D. Rs 4,500 shall be deducted from cash book balance

Answer 1

The correct option is D

Rs 4,500 shall be deducted from cash book balance

Rs 4,500 shall be deducted from the cash book balance while preparing BRS.