Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 46 - No. 14)
If a company makes an error by recording a check for a larger amount than it actually paid, how should it be corrected on the bank reconciliation?
Add the error amount to the bank balance.
Subtract the error amount from the bank balance.
Add the error amount to the book balance.
Subtract the error amount from the book balance.
Explanation
The book balance must be adjusted downwards to correct the overstated expense and the overstated cash reduction.
Comments (0)
