Credit sales to Mohan ₹ 10,000 were posted to his account as ₹ 12,000. This is an error of ..... The wrong effect has been: The correct effect should have been: The rectification entry will be.
This is an error of commission.
The wrong effect has been: Mohan’s A/c Dr. 12,000 To Sales A/c 10,000
The correct effect should have been: Mohan’s A/c Dr. 10,000 To Sales A/c 10,000
The rectification entry will be: Suspense A/c Dr. 2,000 To Mohan’s A/c 2,000
Explanation
The provided context explicitly identifies this scenario, where credit sales of ₹ 10,000 are posted to the individual's account as ₹ 12,000, as an 'error of commission'. The discrepancy arises because Mohan's account was debited excessively (by ₹ 12,000 instead of ₹ 10,000) while the Sales account was credited correctly (assuming the sales book was totaled correctly at ₹ 10,000). This creates a debit difference of ₹ 2,000 in the ledger. To rectify this, the excess debit in Mohan's account must be cancelled out by crediting it, and the debit aspect is transferred to the Suspense Account.
Solution Steps
Step 1: Identify the type of error. Posting an incorrect amount to the correct side of an account is an error of commission.
Step 2: Analyze the wrong effect. Mohan’s A/c was debited by ₹ 12,000 (excess debit of ₹ 2,000) while Sales A/c was credited by ₹ 10,000.
Step 3: Determine the correct effect. Mohan’s A/c should have been debited by ₹ 10,000.
Step 4: Calculate the rectification amount. Difference = ₹ 12,000 - ₹ 10,000 = ₹ 2,000.
Step 5: Pass the rectification entry. Credit Mohan’s A/c to remove the excess debit and debit Suspense A/c.