A purchase return of Rs. 2,200 is correctly credited to Purchase Returns Account, but the supplier's account is credited instead of debited. Which entry rectifies the error?
Correct answer: C. Debit Supplier Rs. 4,400 and credit Suspense Rs. 4,400
- A. Debit Supplier Rs. 2,200 and credit Suspense Rs. 2,200
- B. Debit Suspense Rs. 4,400 and credit Supplier Rs. 4,400
- C. Debit Supplier Rs. 4,400 and credit Suspense Rs. 4,400
- D. Debit Purchase Returns Rs. 2,200 and credit Supplier Rs. 2,200
Explanation
The supplier should have been debited by Rs. 2,200 but was credited by that amount. A debit of Rs. 4,400 removes the wrong credit and records the required debit, with Suspense receiving the credit.
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About Correction of Errors and Suspense Accounts
Accounting errors are corrected by journal entries after identifying whether the mistake affects one account or both sides of double entry. Suspense accounts temporarily hold an unexplained trial balance difference and must be cleared, while errors of omission, commission, principle, original entry and reversal require different corrections.
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