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Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account?
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Goods of the value of ₹2,500 returned by a customer were entered in th...
Rectification of Error using Suspense Account:
Identifying the Error:
- Goods worth ₹2,500 returned by the customer were incorrectly entered in the Sales day Book instead of the Returns Outward Book.
Rectification Entry:
- To rectify this error, we need to reverse the incorrect entry and make a new entry to record the return of goods.
- The rectification entry would be:
- Sales Account Dr. ₹2,500
Suspense Account Cr. ₹2,500
Explanation:
- By debiting the Sales Account with ₹2,500, we are reversing the entry made in error.
- By crediting the Suspense Account with ₹2,500, we are balancing the entry temporarily until the correct entry is determined.
Importance of Suspense Account:
- The Suspense Account is used to temporarily hold entries when there is uncertainty about the correct account to be debited or credited.
- It helps in maintaining the accuracy of the financial records by preventing errors from affecting the final accounts.
Final Step:
- Once the correct entry is identified (in this case, in the Returns Outward Book), the Suspense Account will be adjusted accordingly, ensuring that the books are accurate.
Identifying the Error:
- Goods worth ₹2,500 returned by the customer were incorrectly entered in the Sales day Book instead of the Returns Outward Book.
Rectification Entry:
- To rectify this error, we need to reverse the incorrect entry and make a new entry to record the return of goods.
- The rectification entry would be:
- Sales Account Dr. ₹2,500
Suspense Account Cr. ₹2,500
Explanation:
- By debiting the Sales Account with ₹2,500, we are reversing the entry made in error.
- By crediting the Suspense Account with ₹2,500, we are balancing the entry temporarily until the correct entry is determined.
Importance of Suspense Account:
- The Suspense Account is used to temporarily hold entries when there is uncertainty about the correct account to be debited or credited.
- It helps in maintaining the accuracy of the financial records by preventing errors from affecting the final accounts.
Final Step:
- Once the correct entry is identified (in this case, in the Returns Outward Book), the Suspense Account will be adjusted accordingly, ensuring that the books are accurate.
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Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account?
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Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account?.
Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods of the value of ₹2,500 returned by a customer were entered in the Sales day Book and posted therefrom to the credit of his account. rectification entry with suspense account?.
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