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CMA Foundation · Fundamentals of Financial and Cost Accounting · Adjustment Entries and Rectification of Errors

Rs 3,000 received from Anil was correctly entered in the Cash Book but was posted to the credit of Sunil's account. Which rectifying entry is correct?

Debit Sunil's account and credit Anil's account by Rs 3,000. Sunil was wrongly credited, so the entry reverses that, while Anil, who actually paid, receives the missing credit. It is an error of posting to a wrong personal account.

  1. AAnil A/c Dr 3,000 to Sunil A/c 3,000
  2. BSunil A/c Dr 3,000 to Anil A/c 3,000Correct
  3. CCash A/c Dr 3,000 to Anil A/c 3,000
  4. DSunil A/c Dr 3,000 to Suspense A/c 3,000

Explanation

Sunil was wrongly credited, so debit Sunil to cancel it. Anil should have been credited, so credit Anil. Anil A/c debit would double the error.

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