goods returned by the customer mr.X of Rs. 5650 has been posted in the return inward account as rs. 5560 and in Mr. X a/c as Rs. 6550.
correct entry that should have been recorded--
sales return A/c Dr. 5650
To X's A/c 5650
BUT entry posted in return inward is 90rs short and posting in X's A/c is 900 rs more.. so in order to reach the correct level of entry we will debit sales return A/c by rs 90 and debit excees of 900rs in X's A/c.
Hence the composite rectified entry will be sales return A/c Dr. 90
X's A/c Dr. 900
To suspense A/c 990
Credit to suspense A/c is done to reverse the effect of differnce which was coming in trial balance due to wrong posting of entries. TB showed some diff. which was put to suspense A/c. Now wen the error is detected and rectified ,suspense A/c will not appear on account of passing rectiffied entry.
Dheeraj Sondhiya
(CA- IPCC)
(184 Points)
Replied 18 December 2009
thanks for sharing this valuable information
Anshika
( CA -Industry- Sr.Accounts Officier)
(141 Points)
Replied 21 December 2009
ya it is correct accounting
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