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A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ?
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A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ?
Explanation of a Credit Purchase Mistake in Books


Background Information


  • A credit purchase is when a company buys goods or services on credit from a supplier.

  • Ramesh is a supplier who sold goods worth ₹1040 to the company.

  • The company recorded the transaction in their books as ₹1400, which is a mistake.



Reasons for the Mistake


  • Human error: The person responsible for recording the transaction may have made a mistake in calculating or typing the amount.

  • Lack of attention to detail: The person responsible for recording the transaction may not have reviewed it carefully before entering it into the books.

  • Miscommunication: There may have been a miscommunication between the person who made the purchase and the person responsible for recording it, resulting in the wrong amount being recorded.



Implications of the Mistake


  • The company's financial statements will be inaccurate, as the recorded amount for the credit purchase is higher than the actual amount.

  • The company may pay more taxes than necessary, as the inflated expense will reduce their taxable income.

  • The mistake may affect the company's relationships with their suppliers, as they may be seen as unreliable or disorganized.



How to Correct the Mistake


  • The mistake should be identified as soon as possible.

  • The person responsible for recording the transaction should be notified of the mistake.

  • The transaction should be corrected in the company's books to reflect the actual amount of ₹1040.

  • Any necessary adjustments should be made to the company's financial statements and tax returns.

  • The company should apologize to Ramesh for the mistake and assure him that it will not happen again.



Preventing Similar Mistakes in the Future


  • The company should implement internal controls, such as reviewing transactions before they are recorded in the books.

  • The company should provide training to employees responsible for recording transactions to ensure they understand the importance of accuracy and attention to detail.

  • The company should establish clear communication channels between employees involved in the purchasing and recording process.

Community Answer
A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ?
Suspense A/C dr. ₹360
(1400-1040=360)
to purchase a/C ₹360
(being credit purchase of ₹1040 from Ramesh was passed in the books as ₹1400)
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A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ?
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A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A credit purchase of ₹1040 from Ramesh was passed in books as ₹1400 ?.
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