Question

Pass Journal entries rectifying the following errors:
(i) A cheque for ₹ 10,000 was received from Ranjan on which ₹ 200 Cash Discount was allowed. The cheque was not honoured on due date and the amount of discount was credited to Discount Received Account.
(ii) ₹ 2,000 paid as wages for machinery installation was debited to Wages Account.
(iii) ₹ 5,000 received from Rakesh were credited to his Personal Account. The amount had been written off as bad debts earlier.
(iv) Repair bill of machinery was recorded as ₹ 100 against the bill amount of ₹ 1,000.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(i)	Discount Received A/c	Dr.		200
	To Discount Allowed A/c				200
	(On dishonour of Ranjan’s cheque, instead of crediting Discount Allowed Account, Discount Received Account was wrongly credited, now rectified)
(ii)	Machinery A/c	Dr.		2,000
	To Wages A/c				2,000
	(Wages paid for Installation of Machinery was debited wrongly to Wages Account, now rectified)
(iii)	Rakesh A/c	Dr.		5,000
	To Bad Debt Recovered A/c				5,000
	(Cash received from Rakesh was Credited wrongly to Rakesh’s Account was previously written
	off as Bad Debt, now rectified)
(iv)	Since error is made at time of recording so correct entry would be
	Repair A/c	Dr.		900
	To Cash A/c				900
	(Repair bill Rs 1,000 was recorded as Rs 100, now rectified)