PRC-1 · Chapter 8 · Question 6 of 100
The Returns Inwards Book for December has been under-casted by Rs. 100. What journal entry must be recorded to correct this error?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) DEBIT: Sales return Rs. 100 and CREDIT: Suspense Rs. 100
Explanation
Sales returns naturally carry a debit balance. Since the book was under-casted, the debit side is short by Rs. 100. The correction is to debit Sales Return and credit Suspense.
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