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Rs 6,500 paid to a creditor, Mohan, was correctly entered in the Cash Book but was not posted to Mohan's account at all. Which rectification is correct?
Debit Mohan's Account and credit Suspense Account by Rs 6,500. The cash credit was recorded but the matching debit in the creditor's account was omitted, so the trial balance was balanced by a suspense credit. Posting the omitted debit and crediting suspense corrects it.
- ADebit Mohan's Account Rs 6,500; Credit Suspense Account Rs 6,500Correct
- BDebit Suspense Account Rs 6,500; Credit Mohan's Account Rs 6,500
- CDebit Cash Account Rs 6,500; Credit Mohan's Account Rs 6,500
- DDebit Mohan's Account Rs 6,500; Credit Cash Account Rs 6,500
Explanation
Payment to a creditor requires a debit to Mohan's account. Cash was credited correctly, but the debit was never posted, so credits exceeded debits and Suspense was credited when the trial balance was forced to agree. Rectification debits Mohan's account and debits... the credit Suspense clears the balance.
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