rectify...credit purchase from raghu rs 20000
1 ) were posted to debit of raghu's a/c
2 )were posted to debit of raghavs a/c
what is the wrong entry correct entry and rectification for the following transaction
The following are the rectification entries for the above errors, the explanation is provided below:
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Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
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(i) | Suspense A/c | Dr |
| 40,000 |
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| To Raghu’s A/c |
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| 40,000 |
| (purchase recorded wrongly to the debit of Raghu’s A/c, now rectified) |
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(ii) | Suspense A/c | Dr |
| 40,000 |
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| To Raghav’s A/c |
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| 20,000 |
| To Raghu’s A/c |
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| 20,000 |
| (purchase from Raghu wrongly debited to Raghav’s A/c) |
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Explanation:
(i) Purchases from Raghu wrongly debited to his A/c, however his A/c should have been credited. Therefore, we now credit his A/c with double amount i.e. Rs 40,000 (firstly to cancel the effect of wrongly debiting his A/c with Rs 20,000 and secondly to correctly credit his A/c with Rs 20,000 ). It has been assumed that Purchase A/c was correctly debited and hence here Suspense A/c is debited while rectifying the error.
(ii) In the second case, purchases from Raghu was debited to Raghav's A/c. Now, to rectify this firstly we need to credit Raghav's A/c with Rs 20,000 (to cancel the effect of wrong debit), credit Raghu's A/c with Rs 20,000 (earlier omitted) and Suspense A/c debited with Rs 40,000.
Here, entries are recorded right but posted wrongly to debit of Raghu's A/c (in the first case) and to the debit of Raghav's A/c (in the second case). Therefore, explanation is provided to you.
The correct entry in both the cases will be:
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
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| Purchases A/c | Dr |
| 20,000 |
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| To Raghu’s A/c |
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| 20,000 |
| (goods purchased from Raghu on credit) |
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