In which cases we open cash or bank A/c in rectification of errors
Sarvesh, it completely depends upon the error occurred while passing the entry or posting the entry.
Let us take an example to understand it better.
Example 1: Cash Sales of Rs 5,000 were omitted to be recorded.
In this case, wrong entry will be
No entry, since entry has not yet passed.
Correct entry will be
Cash A/c Dr. 5,000
To Sales A/c 5,000
Rectifying entry will be
Cash A/c Dr. 5,000
To Sales A/c 5,000
Example 2: Wages paid for installation of machinery Rs 1,500 were debited to Wages A/c.
In this case, wrong entry will be
Wages A/c Dr. 1,500
To Cash A/c 1,500
Correct entry will be
Machinery A/c Dr. 1,500
To Cash A/c 1,500
Rectifying entry will be
Machinery A/c Dr. 1,500
To Wages A/c 1,500
Here, in the both the examples cash was involved, but in example-1, it is debited and example-2, it has not been affected. Therefore, it depends the error, that balance of cash/bank will be affected or not.
For more clarity, you may go through the study material provided to you on our site. To view, follow the link given below.
https://www.meritnation.com/cbse/class11-commerce/studymaterial/accountancy/financial-accounting-part-i/trial-balance-and-rectification-of-errors/394_2368_14798#slide1_Errors- Meaning and Types
If you still find any difficulty, then do get back to us. We will help you in the best possible way.
Let us take an example to understand it better.
Example 1: Cash Sales of Rs 5,000 were omitted to be recorded.
In this case, wrong entry will be
No entry, since entry has not yet passed.
Correct entry will be
Cash A/c Dr. 5,000
To Sales A/c 5,000
Rectifying entry will be
Cash A/c Dr. 5,000
To Sales A/c 5,000
Example 2: Wages paid for installation of machinery Rs 1,500 were debited to Wages A/c.
In this case, wrong entry will be
Wages A/c Dr. 1,500
To Cash A/c 1,500
Correct entry will be
Machinery A/c Dr. 1,500
To Cash A/c 1,500
Rectifying entry will be
Machinery A/c Dr. 1,500
To Wages A/c 1,500
Here, in the both the examples cash was involved, but in example-1, it is debited and example-2, it has not been affected. Therefore, it depends the error, that balance of cash/bank will be affected or not.
For more clarity, you may go through the study material provided to you on our site. To view, follow the link given below.
https://www.meritnation.com/cbse/class11-commerce/studymaterial/accountancy/financial-accounting-part-i/trial-balance-and-rectification-of-errors/394_2368_14798#slide1_Errors- Meaning and Types
If you still find any difficulty, then do get back to us. We will help you in the best possible way.