PRC-1 · Chapter 8 · Question 48 of 100
A purchase of goods for Rs. 3,500 on credit was recorded in the purchases day book as Rs. 5,300 and posted to the ledger accordingly. What is the correcting journal entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Payables Rs. 1,800, Credit Purchases Rs. 1,800
Explanation
This transposition error of original entry caused both Purchases and Payables to be overstated by 1,800. Reversing this requires debiting Payables and crediting Purchases.
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