# 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? with Answer - Accounting Mcqs | TestPrep

> Solved MCQ: 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 Correct Answer: D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# 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

Direct Answer & Quick Reference

The correct option is **D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book**.

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 **(Correct Answer)**

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Verified Key: D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book
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