Answer:
Add $45 to the book balance.
Explanation:
This is a transposition error which is an example of error of original entry. A transposition error occurs when the figures are posted in the wrong order, while an error original entry occurs when a wrong amount is entered into the right account. This kind of error usually causes discrepancy between the bank balance and the book balance.
To correct this error in the question, we first find the difference between the right amount and the wrong amount as follows:
Difference = Right amount – Wrong amount = $272 - $227 = $45
Therefore, the difference of $45 will be added to the book balance to bring it into an agreement with the bank treatment as follows:
Bank correct treatment = $272
New book treatment = Wrong amount + Difference = $227 + $45 = $272
It can now be seen that both posting are now in agreement after the correction.
