Library

Fix the Books

Level 1 of 10 · Spot classification errors — even ones that still balance.

Case 1 — The friendly bank

What actually happened: The business borrowed $2,000 cash from the bank, repayable over 12 months.

How it was recorded

  • Cash +$2,000
  • Owner's equity +$2,000

Careful: this entry still balances. Balance is not proof of correctness.

Choose the corrected record

Amounts are in New Zealand dollars. GST and income tax are excluded so each correction stays clear.