The purchases book is undercast by Rs. 4,000. Which entry rectifies the error?
Correct answer: C. Debit Purchases Account Rs. 4,000
- A. Debit Suspense Account Rs. 4,000
- B. Credit Suspense Account Rs. 4,000
- C. Debit Purchases Account Rs. 4,000
- D. Credit Purchases Account Rs. 4,000
Explanation
The purchases account has been debited by Rs. 4,000 less than required. It must be debited for the omitted amount, with the corresponding credit made 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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