Cash received from a debtor of Rs. 5,000 is entered correctly in Cash Account, but the debtor's account is debited instead of credited. Which rectifying entry is required?
Correct answer: C. Debit Suspense Rs. 10,000 and credit Debtor Rs. 10,000
- A. Debit Suspense Rs. 5,000 and credit Debtor Rs. 5,000
- B. Debit Debtor Rs. 10,000 and credit Suspense Rs. 10,000
- C. Debit Suspense Rs. 10,000 and credit Debtor Rs. 10,000
- D. Debit Debtor Rs. 5,000 and credit Cash Rs. 5,000
Explanation
The debtor was wrongly debited by Rs. 5,000 and should instead be credited by Rs. 5,000. A credit of Rs. 10,000 to the debtor removes the wrong debit and records the required credit, with the equal debit going to Suspense.
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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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