Question
Company’s cash book shows ₹1,20,000 (CR) as at
year-end. Bank statement shows ₹1,05,000 (CR). Outstanding cheques total ₹20,000 and deposits-in-transit stand at ₹10,000. Additionally, bank charged ₹2,000 as service charges not yet recorded in books. Determine the corrected cash book balance at year-end.Solution
Here, we are correcting the cash book balance: • Starting balance (per cash book) = ₹1,20,000 (CR means positive balance). • Deduct bank charges not recorded = ₹1,20,000 − ₹2,000 = ₹1,18,000. The outstanding cheques and deposits in transit affect only the bank statement side, not the cash book correction. Final corrected cash book balance = ₹1,18,000.
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