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AE for Sale of Goods

goods costing...

Question

goods costing rs 2000 were purchased for various members of the staff and the cost was included in the purchases. A similar amount was deducted from the salaries of the staff members concerned and the net payments to them debited to the salaries account.pass the rectification entry.

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Solution

Dear Student,
Since the amount of goods purchased is deducted from the salaries of the employees, it has to be given back and accordingly 'Salaries Account' will be debited and 'Purchases Account' will be credited to rectify the effect.

Salaries A/c Dr. 2,000
To Purchases A/c 2,000

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