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The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:
- a)Debited by Rs. 180
- b)Credited by Rs. 180
- c)Debited by Rs. 1080
- d)Credited by Rs. 1080
Correct answer is option 'B'. Can you explain this answer?
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The goods sold for Rs. 900 but the amount was entered in the sales Acc...
Rectification of Sales Account
Rectification of errors in accounting is important to ensure that the financial statements reflect the true and fair view of the company's financial position. In this case, the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080, which is an error.
Impact of the Error
The error of Rs. 180 (1080-900) has resulted in an overstatement of sales account by Rs. 180. As a result, the profit and loss account will also be overstated by Rs. 180.
Rectification of the Error
To rectify the error, the sales account needs to be debited by Rs. 180. However, since the error was entered as a higher amount in the sales account, the rectification entry will be to credit the suspense account by Rs. 180.
Suspense Account
A suspense account is a temporary account used to hold the difference between the debit and credit entries in the books of accounts until the error is rectified. Once the rectification entry is made, the suspense account is closed by transferring the balance to the correct accounts.
In this case, the suspense account will be credited by Rs. 180 to hold the difference between the actual amount of sales and the amount entered in the sales account. Once the error is rectified, the balance of the suspense account will be transferred to the correct accounts, and the suspense account will be closed.
Conclusion
In conclusion, the rectification of the error of Rs. 180 will result in the credit of the suspense account by Rs. 180. The suspense account will hold the difference between the actual amount of sales and the amount entered in the sales account until the error is rectified.
Rectification of errors in accounting is important to ensure that the financial statements reflect the true and fair view of the company's financial position. In this case, the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080, which is an error.
Impact of the Error
The error of Rs. 180 (1080-900) has resulted in an overstatement of sales account by Rs. 180. As a result, the profit and loss account will also be overstated by Rs. 180.
Rectification of the Error
To rectify the error, the sales account needs to be debited by Rs. 180. However, since the error was entered as a higher amount in the sales account, the rectification entry will be to credit the suspense account by Rs. 180.
Suspense Account
A suspense account is a temporary account used to hold the difference between the debit and credit entries in the books of accounts until the error is rectified. Once the rectification entry is made, the suspense account is closed by transferring the balance to the correct accounts.
In this case, the suspense account will be credited by Rs. 180 to hold the difference between the actual amount of sales and the amount entered in the sales account. Once the error is rectified, the balance of the suspense account will be transferred to the correct accounts, and the suspense account will be closed.
Conclusion
In conclusion, the rectification of the error of Rs. 180 will result in the credit of the suspense account by Rs. 180. The suspense account will hold the difference between the actual amount of sales and the amount entered in the sales account until the error is rectified.
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Community Answer
The goods sold for Rs. 900 but the amount was entered in the sales Acc...
The answer is B Because credit means the money or benefit which is given to be done in a future date and as the sales were of 900 and it is entered 1080 means 180 more. It means the entered amount is more than the actual amount. So the money should be Credited by 180.
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The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer?
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The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? 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 The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer?.
The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? 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 The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer?.
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The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer?, a detailed solution for The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:a)Debited by Rs. 180b)Credited by Rs. 180c)Debited by Rs. 1080d)Credited by Rs. 1080Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
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