If a cheque of Rs 1,000 is issued but recorded in the cash column of the Cash Book instead of the bank column, what is the effect on the bank balance?
A. Bank balance in Cash Book is understated by Rs 1,000
B. Cash balance is overstated
C. No effect on any balance
D. Bank balance in Cash Book is overstated by Rs 1,000
Answer: Option D
Solution (By JKSSB Mock Tests)
Since the bank column was not reduced (credited), the bank balance as per the Cash Book remains artificially high (overstated).
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