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Rectification of Error(after BS)
Goods of ₹ 12500 returned to T Corporation were recorded in Return Inward book as ₹21,500 and from there it was posted to the debit of T Corporation .
Replies (4)
Quick Summary
Sales return book must be Credited with same amount. (Can use payables account)
T corporation is sundry creditors aka payables, must be credited back 21500₹. Debit receivables with 12,500₹.
Credit purchase returns book with 12,500.
No wonder no one passes exams properly because of the language, look here, sales return was debited or credited was not given. These question papers will never change
Sir, in that case error s happened after Balance Sheet .
there are two errors ,one - return outward is wrongly recorded as return inward and two- amount is also recorded wrongly .
first ,we need to remove extra debit to T corporation i.e,₹9000 by crediting it.Also we need to remove wrong credit of ₹ 21500 in sales return by debiting it and credit ₹12500 to purchase returns a/c.
there are two errors ,one - return outward is wrongly recorded as return inward and two- amount is also recorded wrongly .
first ,we need to remove extra debit to T corporation i.e,₹9000 by crediting it.Also we need to remove wrong credit of ₹ 21500 in sales return by debiting it and credit ₹12500 to purchase returns a/c.
Sure, what ever way one can adjust, one can do it. The key to rectification of errors is having clarity on wrong transaction, This is a very important chapter in accounting.
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