A supplier was granted a $2000 discount for early repayment of a debt, but the cashier recorded the full amount without deducting the discount in the cash book. What adjustment is necessary in the cash book to reflect the accurate cash balance?

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$2000 should be added (debited) to the cash book$2000 should be subtracted (credited) from the cash book$4000 should be added (debited) to the cash book$4000 should be subtracted (credited) from the cash bookNo adjustment is required

Explanation

Since the cashier recorded the total amount received without deducting the $2000 discount, the cash book shows an inflated cash balance. To correct this, the cash book must be credited by $2000 to reduce the recorded cash and reflect the actual amount received after the discount.