The payment side of Cash Book is undercast by Rs. 250. If the starting...
Treatment to Reach Overdraft Balance of Cash Book
There are different treatment options available to reach the Overdraft Balance of Cash Book, depending on the situation. In this case, the payment side of Cash Book is undercast by Rs. 250, and the starting point of BRS is the Overdraft Balance as per Pass Book. The correct treatment option is to:
- Add Rs. 250 to the Cash Book balance to correct the undercasting error. This will increase the balance of Cash Book and bring it closer to the balance of Pass Book.
- The reason for adding Rs. 250 instead of subtracting it is that the undercasting error is on the payment side of Cash Book. Therefore, the actual payments made were Rs. 250 more than what was recorded in the Cash Book. As a result, the balance of Cash Book is lower than it should be, and it needs to be corrected by adding the missing amount.
- Once the correction is made, the balance of Cash Book should be compared to the balance of Pass Book. If they match, the reconciliation is complete. If they don't match, further investigation is needed to find the reasons for the differences and reconcile the accounts accordingly.
Conclusion
In conclusion, the correct treatment to reach the Overdraft Balance of Cash Book when the payment side is undercast by Rs. 250 is to add Rs. 250 to the Cash Book balance. This will correct the error and bring the balance of Cash Book closer to the balance of Pass Book, which is the starting point of BRS. By following this treatment, the accounts can be reconciled accurately and efficiently, and any discrepancies can be resolved promptly.
The payment side of Cash Book is undercast by Rs. 250. If the starting...
Correct is b bcoz starting point is overdraft passbook and cash book payment side is under cast by 250 (one sided mistake) if we less 250 from the overdraft passbook then we get cashbook balance. that's why we deduct 250
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.