Rectification Entry with Suspense Account
In this scenario, the receipt of cash of $5,000 from Mr. Avinash was incorrectly posted to the debit of his account. To rectify this error, a journal entry needs to be made using a suspense account.

Journal Entry:
- Debit Suspense Account $5,000
- Credit Mr. Avinash's Account $5,000

Explanation:
1. Error Identification: The error in posting the cash receipt to the debit side of Mr. Avinash's account was identified.
2. Journal Entry: To rectify this error, a journal entry is made debiting the suspense account and crediting Mr. Avinash's account. The suspense account is used as a temporary placeholder until the correct account is identified.
3. Impact on Financial Statements: This rectification entry ensures that the account balances are corrected and the financial statements reflect the accurate financial position of the business.
4. Subsequent Correction: Once the correct account is identified, the amount can be transferred from the suspense account to the correct account through another journal entry to complete the rectification process.
By following the above steps and using a suspense account, the error in posting the cash receipt can be rectified effectively without impacting the accuracy of the financial statements.