Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 32 - No. 7)
A company issued a check for $100, but the bank statement shows it cleared for $1,000. What is the impact of the error on a bank reconciliation?
Add $900 to the bank balance.
Subtract $900 from the bank balance.
Add $900 to the book balance.
Subtract $900 from the book balance.
Explanation
The company overstated cash disbursement; the book balance should be adjusted downward.
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