Mathematics · Accounting
A bank branch discovers three errors in its ledger on 31 March 2025: 1. A payment of 15,000 rupees for office rent was debited to the rent account as 51,000 rupees. 2. A cheque of 25,000 rupees received from a customer was credited to the customer's account twice. 3. The total of the purchase book for stationery was under-cast by 5,000 rupees. Calculate the net effect of these errors on the bank's reported profit before rectification and determine the amount needed to balance the suspense account if these are the only errors.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Profit is understated by 31,000 rupees and suspense account needs a debit of 16,000 rupees.✓
- 2Profit is overstated by 36,000 rupees and suspense account needs a debit of 16,000 rupees.
- 3Profit is understated by 31,000 rupees and suspense account needs a credit of 66,000 rupees.
- 4Profit is understated by 11,000 rupees and suspense account needs a credit of 56,000 rupees.
Correct answer
Profit is understated by 31,000 rupees and suspense account needs a debit of 16,000 rupees.
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