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Question
When balance as per Cash Book is the starting point which of the following is subtracted ________________.
When balance as per Cash Book is the starting point which of the following is subtracted ________________.
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Solution
The correct option is A Uncollected Cheques
When balance as per cashbook is the starting point adjustments are to be made in the cashbook. Uncollected cheques are the cheques which are deposited in the bank but not cleared by the bank or not credited in the bank account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are subtracted from the cashbook balance so that both the books come at par.
When balance as per cashbook is the starting point adjustments are to be made in the cashbook. Uncollected cheques are the cheques which are deposited in the bank but not cleared by the bank or not credited in the bank account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are subtracted from the cashbook balance so that both the books come at par.
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