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Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry?
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Purchased goods from sita for rs.3600 but was recorded in sita's a/c r...
Purchasing Goods from Sita
When an individual or a business purchases goods from a supplier, it is essential to record the transaction accurately in the accounting records. In this case, the purchase of goods amounting to Rs. 3600 was made from Sita. However, the transaction was mistakenly recorded in Sita's account for Rs. 6300. To rectify this error, a proper rectifying entry needs to be made.
Rectifying Entry
To correct the error in the recording of the purchase, a rectifying entry should be made. The rectifying entry will involve adjusting both the accounts involved, i.e., the Purchases account and Sita's account. The rectifying entry can be as follows:
Debit: Purchases account - Rs. 2700
Credit: Sita's account - Rs. 2700
Explanation of Rectifying Entry
The rectifying entry above corrects the error by reducing the amount recorded in Sita's account. Here's a detailed explanation of the rectifying entry:
1. Debit: Purchases account - Rs. 2700
- The Purchases account is debited with Rs. 2700 to reduce the amount of incorrect recording.
- This adjustment decreases the total purchases made by the correct amount of Rs. 2700, bringing it down to the actual purchase amount of Rs. 3600.
2. Credit: Sita's account - Rs. 2700
- Sita's account is credited with Rs. 2700 to offset the incorrect recording.
- This adjustment reduces the balance in Sita's account by the correct amount of Rs. 2700.
Effect on Financial Statements
The rectifying entry will have the following effects on the financial statements:
1. Income Statement
- The correction will not have any impact on the income statement as it only relates to the recording of the purchase transaction.
2. Balance Sheet
- The correction will reduce the balance of the Purchases account by Rs. 2700.
- The balance of Sita's account will also be reduced by Rs. 2700.
- As a result, the total assets, liabilities, and equity will remain unaffected.
By making the rectifying entry, the error in the recording of the purchase transaction will be corrected, ensuring the accuracy of the financial records.
When an individual or a business purchases goods from a supplier, it is essential to record the transaction accurately in the accounting records. In this case, the purchase of goods amounting to Rs. 3600 was made from Sita. However, the transaction was mistakenly recorded in Sita's account for Rs. 6300. To rectify this error, a proper rectifying entry needs to be made.
Rectifying Entry
To correct the error in the recording of the purchase, a rectifying entry should be made. The rectifying entry will involve adjusting both the accounts involved, i.e., the Purchases account and Sita's account. The rectifying entry can be as follows:
Debit: Purchases account - Rs. 2700
Credit: Sita's account - Rs. 2700
Explanation of Rectifying Entry
The rectifying entry above corrects the error by reducing the amount recorded in Sita's account. Here's a detailed explanation of the rectifying entry:
1. Debit: Purchases account - Rs. 2700
- The Purchases account is debited with Rs. 2700 to reduce the amount of incorrect recording.
- This adjustment decreases the total purchases made by the correct amount of Rs. 2700, bringing it down to the actual purchase amount of Rs. 3600.
2. Credit: Sita's account - Rs. 2700
- Sita's account is credited with Rs. 2700 to offset the incorrect recording.
- This adjustment reduces the balance in Sita's account by the correct amount of Rs. 2700.
Effect on Financial Statements
The rectifying entry will have the following effects on the financial statements:
1. Income Statement
- The correction will not have any impact on the income statement as it only relates to the recording of the purchase transaction.
2. Balance Sheet
- The correction will reduce the balance of the Purchases account by Rs. 2700.
- The balance of Sita's account will also be reduced by Rs. 2700.
- As a result, the total assets, liabilities, and equity will remain unaffected.
By making the rectifying entry, the error in the recording of the purchase transaction will be corrected, ensuring the accuracy of the financial records.
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Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry?
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Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry?.
Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods from sita for rs.3600 but was recorded in sita's a/c rs.6300 what will be the rectifying entry?.
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