Rectification of error question Issued a cheque for Rs. 2,500 in favou...
Rectification of Error: Issued a cheque for Rs. 2,500 in favour of Mr. Sameer was wrongly posted on debit side of the Cash book under column.
To rectify the error of wrongly posting a cheque for Rs. 2,500 in favor of Mr. Sameer on the debit side of the Cash book under the wrong column, the following steps need to be taken:
1. Identify the error: The first step is to identify the error in the Cash book. In this case, the error is that the cheque issued to Mr. Sameer has been incorrectly posted on the debit side of the Cash book.
2. Determine the correct side and column: The next step is to determine the correct side and column in which the entry should have been posted. Since a cheque issued is a payment, it should have been posted on the credit side of the Cash book. The correct column would depend on the nature of the transaction. If the cheque was issued for a payment related to purchases, it would be posted in the purchases column. If it was for any other type of payment, it would be posted in the relevant column accordingly.
3. Calculate the rectification amount: In this case, the rectification amount would be Rs. 2,500, as the original entry was for this amount.
4. Make the rectification entry: To rectify the error, a new entry needs to be made in the Cash book to reverse the incorrect entry and record the correct entry. The rectification entry would be as follows:
- Debit the correct column with Rs. 2,500 (e.g., Purchases, if the payment was related to purchases)
- Credit the wrong column where the entry was initially made with Rs. 2,500 (e.g., Debit)
5. Calculate the net effect: After making the rectification entry, calculate the net effect on the Cash book. In this case, the net effect would be zero, as the incorrect debit entry is canceled out by the correct credit entry.
6. Prepare a narration: Finally, a narration should be included in the Cash book to explain the rectification entry. The narration should state the reason for the rectification, such as "Rectification of error: Cheque issued to Mr. Sameer wrongly posted on the debit side of the Cash book. Rectified by posting the correct entry on the credit side in the relevant column."
By following these steps, the error of wrongly posting the cheque for Rs. 2,500 in favor of Mr. Sameer on the debit side of the Cash book under the wrong column can be rectified accurately and the Cash book can be corrected.
Rectification of error question Issued a cheque for Rs. 2,500 in favou...
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