Question

Cash received from Jamna Das Rs$687$ was posted to the debit of Janki Das as Rs$678$. If this error located after preparation of final account then which of the following rectification entry is correct?

• A. Jamna Das A/c Dr. $687$
  Janki Das A/c Dr $678$
  To Profit & Loss Adj.A/c $1,365$
• B. Profit & Loss Adj. A/c Dr. $1,365$
  To Jamna Das A/c Dr $687$
  To Janki Das A/c $678$
• C. Suspense A/c Dr. $1,365$
  To Jamna Das A/c Dr $687$
  To Janki Das A/c $678$
• D. Jamna Das A/c Dr $687$
  Janki Das A/c $678$
  To Suspense A/c Dr. $1,365$

Answer 1

Answer: (C)

Suspense A/c Dr. $1,365$

To Jamna Das A/c Dr $687$
To Janki Das A/c $678$

Correct entry :-

Cash Account ......... Dr 687

To Jamna Das A/c 687

Wrong entry:-

Jamki Das A/c ...............Dr 687

To Suspense A/c 687

( Suspense account is debited as the error is in the account of Jamki das and Jamna das and, not cash account, hence when destination cannot be determined suspense account is created temporarily. )

Rectification entry:-

Suspense A/c ..........Dr 1,365

To Jamki das A/c 687

To jamna Das A/c 687