PRC-1 · Chapter 8 · Question 78 of 100
A received cheque from debtor Faraz worth Rs. 100,000 was treated as received from debtor Sarfaraz. What is the correcting entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debtor - Sarfaraz (debit) = Rs. 100,000 and debtor Faraz (credit) = Rs. 100,000
Explanation
The receipt was wrongly credited to Sarfaraz instead of Faraz. To correct it, the false credit is reversed (Debit Sarfaraz 100,000) and the correct account is credited (Credit Faraz 100,000).
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