A cheque of Rs.200 paid to a creditor has been entered by mistake in the cash column why it is subtracted in the Bank reconciliation statement ? when overdraft as per cash book.
Megha
'A cheque of Rs 200 was entered by mistake in the cash column' this means cash book balance is higher than the pass book balance. As Rs 200 is subtracted only from the Pass Book (being cheque issued and presented) and not from the Cash Book.
Thus, to make Cash Book = Pass Book (i.e. to reconcile the books), we will subtract Rs 200 from the balance as per Cash Book.
Hope this clarifies your doubt!!
'A cheque of Rs 200 was entered by mistake in the cash column' this means cash book balance is higher than the pass book balance. As Rs 200 is subtracted only from the Pass Book (being cheque issued and presented) and not from the Cash Book.
Thus, to make Cash Book = Pass Book (i.e. to reconcile the books), we will subtract Rs 200 from the balance as per Cash Book.
Hope this clarifies your doubt!!