Few days ago; I taught a student who is the daughter of my friend. She could not understand the rectification of errors. I have told that students should follow 3 steps when they face the problem in their book.
1. Students should write correct journal entry or treatment.
2. Students should write wrong journal entry or treatment on the basis of the problem given in the book.
3. Adjust the entry as per accounting rules.
Now; we understand above steps with a simple example.
We sold the goods of Rs. 650 but entered as 540. This error is of figures. We entered wrong figures in the entry. So we will follow above 3 steps.
1. Correct entry
Cash account Dr. 650
Sales account Cr. 650
2. Wrong journal entry
Cash account Dr. 540
Sales account Cr. 540
3. Rectify
Cash account Dr. 110
Sales account Cr. 110
We find that due to error we show less amount. So in third step ; we have increased by passing same entry.
1. Students should write correct journal entry or treatment.
2. Students should write wrong journal entry or treatment on the basis of the problem given in the book.
3. Adjust the entry as per accounting rules.
Now; we understand above steps with a simple example.
We sold the goods of Rs. 650 but entered as 540. This error is of figures. We entered wrong figures in the entry. So we will follow above 3 steps.
1. Correct entry
Cash account Dr. 650
Sales account Cr. 650
2. Wrong journal entry
Cash account Dr. 540
Sales account Cr. 540
3. Rectify
Cash account Dr. 110
Sales account Cr. 110
We find that due to error we show less amount. So in third step ; we have increased by passing same entry.
