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A cheque for 100 rupees received from mohan was dishonoured and had been posted to the debit of sales return account, pass the rectifying entry?
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A cheque for 100 rupees received from mohan was dishonoured and had be...
Rectifying Entry for Dishonoured Cheque

Introduction: In business, it is common to receive payments in the form of cheques. However, sometimes these cheques are dishonoured due to various reasons such as insufficient funds, mismatched signatures, or post-dated cheques. In such cases, the amount received is not credited to the account and needs to be rectified.

Scenario: In this case, a cheque for 100 rupees received from Mohan was dishonoured. The amount was initially credited to the account, but later it was found that the cheque was dishonoured. Hence, the entry needs to be rectified.

Rectifying Entry: The rectifying entry for the dishonoured cheque would involve reversing the initial entry made for the cheque. The entry would be as follows:

Sales Return A/c Debit 100 rupees

Mohan A/c Credit 100 rupees

Explanation: The sales return account was credited with 100 rupees when the cheque was received from Mohan. However, since the cheque was dishonoured, the amount needs to be reversed. Hence, the sales return account needs to be debited with 100 rupees to reverse the initial entry. At the same time, the account from where the payment was received, i.e., Mohan's account, needs to be credited with 100 rupees to reflect that the amount was not received.

Conclusion: In conclusion, the rectifying entry for the dishonoured cheque involves reversing the initial entry made for the cheque by debiting the sales return account and crediting the account from where the payment was received. This entry would ensure that the books of accounts reflect the correct amount of transactions and prevent any errors in the future.
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A cheque for 100 rupees received from mohan was dishonoured and had be...
Mohan a/c dr. 100
To Return inwards a/c cr. 100
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A cheque for 100 rupees received from mohan was dishonoured and had been posted to the debit of sales return account, pass the rectifying entry?
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