The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is?

Accounting Mcqs
BILAL KHATTAK0

A. The Trial Balance will not agree
B. The balance of creditors is understated
C. The purchases are understated 
D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book 

Related Mcqs:

  1. Bank reconciliation is a statement prepared to reconcile__________??
  2. Which of these documents is not required for Bank Reconciliation??
  3. Benefits of preparing Bank Reconciliation Statement includes___________??
  4. The Bank Reconciliation Statement is prepared??
  5. A company was entered in hire purchase agreement and had to pay $1000 per month. Three payments were made via bank account but no entry was found in cash book. Identify the correct adjustment in cash book?
  6. Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book??
  7. Bank reconciliation statement is a part of_________??
  8. Which of the following statements is true??
  9. Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business).?
  10. Debit side of Bank Pass book corresponds to___________??

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