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Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the book value of furniture was Rs.2,500. What will be the rectifying entry?
- a)Sales A/c Dr. 2000 Suspense A/c Dr. 500To furniture A/c 2500
- b)Sales A/c Dr. 2000 P & L A/c Dr. 500 To Furniture A/c 2500
- c)Sales A/c Dr. 2000 Suspense A/c Dr. 500 To sona A/c 2500
- d)Furniture A/c Dr. 2000 To sona A/c 2000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the ...
Rectifying Entry for the Incorrect Recording of Furniture Sale
The correct rectifying entry for the incorrect recording of the furniture sale would be option 'B':
Sales A/c Dr. 2000
P&L A/c Dr. 500
To Furniture A/c 2500
Explanation:
1. Incorrect Recording:
The original entry recorded the sale of the old furniture to Sona as a regular sales transaction, which resulted in an understatement of the book value of the furniture by Rs. 500.
2. Rectification:
To rectify this error, we need to reverse the incorrect entry and record the appropriate entries.
- Sales A/c Dr. 2000: This entry will reverse the incorrect credit entry made to the Sales Account for Rs. 2000. By debiting the Sales Account, we are reducing the amount initially recorded as sales.
- P&L A/c Dr. 500: This entry will record the expense incurred due to the incorrect sale recording. The P&L (Profit and Loss) Account is debited to reflect the reduction in profit caused by the error.
- To Furniture A/c 2500: This entry will credit the Furniture Account with the correct value of the old furniture, i.e., Rs. 2500. By doing so, we are increasing the book value of the furniture to the correct amount.
3. Reason for Option 'B' as the Correct Answer:
Option 'B' is the correct answer because it includes all the necessary entries to rectify the error.
- Option 'A' is incorrect because it does not include the entry to debit the P&L Account for the expense incurred due to the error.
- Option 'C' is incorrect because it includes an entry to debit the Suspense Account, which is not necessary in this case. The Suspense Account is typically used when the rectifying entry cannot be determined immediately.
- Option 'D' is incorrect because it does not include an entry to debit the P&L Account for the expense incurred due to the error.
By selecting option 'B' and recording the rectifying entry, the error in the bookkeeping will be corrected, and the financial statements will reflect the accurate value of the old furniture.
The correct rectifying entry for the incorrect recording of the furniture sale would be option 'B':
Sales A/c Dr. 2000
P&L A/c Dr. 500
To Furniture A/c 2500
Explanation:
1. Incorrect Recording:
The original entry recorded the sale of the old furniture to Sona as a regular sales transaction, which resulted in an understatement of the book value of the furniture by Rs. 500.
2. Rectification:
To rectify this error, we need to reverse the incorrect entry and record the appropriate entries.
- Sales A/c Dr. 2000: This entry will reverse the incorrect credit entry made to the Sales Account for Rs. 2000. By debiting the Sales Account, we are reducing the amount initially recorded as sales.
- P&L A/c Dr. 500: This entry will record the expense incurred due to the incorrect sale recording. The P&L (Profit and Loss) Account is debited to reflect the reduction in profit caused by the error.
- To Furniture A/c 2500: This entry will credit the Furniture Account with the correct value of the old furniture, i.e., Rs. 2500. By doing so, we are increasing the book value of the furniture to the correct amount.
3. Reason for Option 'B' as the Correct Answer:
Option 'B' is the correct answer because it includes all the necessary entries to rectify the error.
- Option 'A' is incorrect because it does not include the entry to debit the P&L Account for the expense incurred due to the error.
- Option 'C' is incorrect because it includes an entry to debit the Suspense Account, which is not necessary in this case. The Suspense Account is typically used when the rectifying entry cannot be determined immediately.
- Option 'D' is incorrect because it does not include an entry to debit the P&L Account for the expense incurred due to the error.
By selecting option 'B' and recording the rectifying entry, the error in the bookkeeping will be corrected, and the financial statements will reflect the accurate value of the old furniture.
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Community Answer
Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the ...
First we do wrong entry was :-
cash. a/c. dr. 2000
to sales a/c. 2000
now we know that sales word is wrong in this entry , amount is also wrong and as we know that we get loss from sale of furniture so we should also have to write p/l a/c so its right entry is :-
sales a/c dr. 2000
p/l a/c. dr. 500
to furniture a/c 2500
cash. a/c. dr. 2000
to sales a/c. 2000
now we know that sales word is wrong in this entry , amount is also wrong and as we know that we get loss from sale of furniture so we should also have to write p/l a/c so its right entry is :-
sales a/c dr. 2000
p/l a/c. dr. 500
to furniture a/c 2500
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Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the book value of furniture was Rs.2,500. What will be the rectifying entry?a)Sales A/c Dr. 2000 Suspense A/c Dr. 500To furniture A/c 2500b)Sales A/c Dr. 2000 P & L A/c Dr. 500 To Furniture A/c 2500c)Sales A/c Dr. 2000 Suspense A/c Dr. 500 To sona A/c 2500d)Furniture A/c Dr. 2000 To sona A/c 2000Correct answer is option 'B'. Can you explain this answer?
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Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the book value of furniture was Rs.2,500. What will be the rectifying entry?a)Sales A/c Dr. 2000 Suspense A/c Dr. 500To furniture A/c 2500b)Sales A/c Dr. 2000 P & L A/c Dr. 500 To Furniture A/c 2500c)Sales A/c Dr. 2000 Suspense A/c Dr. 500 To sona A/c 2500d)Furniture A/c Dr. 2000 To sona A/c 2000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the book value of furniture was Rs.2,500. What will be the rectifying entry?a)Sales A/c Dr. 2000 Suspense A/c Dr. 500To furniture A/c 2500b)Sales A/c Dr. 2000 P & L A/c Dr. 500 To Furniture A/c 2500c)Sales A/c Dr. 2000 Suspense A/c Dr. 500 To sona A/c 2500d)Furniture A/c Dr. 2000 To sona A/c 2000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sold old furniture valued Rs.2,000 to Sona was recorded as sales, the book value of furniture was Rs.2,500. What will be the rectifying entry?a)Sales A/c Dr. 2000 Suspense A/c Dr. 500To furniture A/c 2500b)Sales A/c Dr. 2000 P & L A/c Dr. 500 To Furniture A/c 2500c)Sales A/c Dr. 2000 Suspense A/c Dr. 500 To sona A/c 2500d)Furniture A/c Dr. 2000 To sona A/c 2000Correct answer is option 'B'. Can you explain this answer?.
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