O-LevelAccountingVerification of accounting records7707/12 · May/June 2025 · Q101 Mark
Miguel's cash book showed a debit bank balance of $4220. He later discovered the following errors. 1 A cheque for $200, issued for the purchase of office equipment, had been recorded in error in the office expenses account. 2 Bank charges of $30 had been recorded in the cash book as $70. What was the effect of these errors on his statement of financial position? The options present effects on 'non-current assets (cost)' and 'current assets'.
Aoverstated by $200, no effect
Bunderstated by $200, no effect
Cunderstated by $200, overstated by $30
Dunderstated by $200, understated by $40
✓ Correct answer
D: understated by $200, understated by $40
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