Question 6 of 52intermediate🔧 ApplyNumerical3 marks

Cash paid to Neha ₹ 2,000 was not posted to her account. This is an error of ..... The wrong effect has been: The correct effect should have been: The rectification entry will be:

Correct Answer

This is an error of commission (partial omission).

The wrong effect has been: The Cash Account has been correctly credited in the Cash Book, but Neha's Account has not been debited in the ledger. As per the provided context (Rule 9), if a transaction is recorded in the cash book, the error in posting relates to the other affected account.

The correct effect should have been: Neha's Account should have been debited with ₹ 2,000, and the Cash Account should have been credited with ₹ 2,000.

Neha's A/cDr.2,000
To Cash A/c2,000

The rectification entry will be: Since the error affects only one account (Neha's), it is rectified using a Suspense Account.

Neha's A/cDr.2,000
To Suspense A/c2,000
(Being cash paid to Neha, which was not posted to her account, now rectified)
Exercise: Test Your Understanding - III | Q: 2 | (Page 24)
For More Understanding

Explanation

This question is derived from 'Test Your Understanding - III' in the provided text. The solution applies Rule 9 ('If a transaction is recorded in cash book, then the error in posting relates to the other affected account') and the principles from section 6.6.2 regarding errors affecting the trial balance (one-sided errors), which are rectified using the Suspense Account.

Solution Steps

  1. Step 1: Identify the Error Type. The transaction is recorded in the Cash Book but omitted in the Ledger (Neha's A/c). This is an error of commission (specifically a partial omission of posting).

  2. Step 2: Determine the Wrong Effect. The Cash Account is correct. Neha's Account has a short debit of ₹ 2,000 because it was not posted.

  3. Step 3: Determine the Correct Effect. The correct entry should have been a Debit to Neha's A/c and a Credit to Cash A/c.

  4. Step 4: Pass the Rectification Entry. To fix the short debit, Debit Neha's A/c with ₹ 2,000. Since the Cash A/c was already correct, we cannot credit it again; instead, we Credit the Suspense A/c to balance the entry.

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