Rectification of errors under self-balancing system[Accounting]
in the self-balancing system, we must justify the nature of error whether it affected the total of the subsidiary book or it is related to the transfer of the amount from one Ledger to another or it is committed to posting from journal to ledger accounts.(Rectification of errors under self-balancing system)
Error in affecting the total of 1. Sales journal 2. Purchase journal 3. Return inward journal 4. Return outward journal 5. bill payable journal 6. bill receivable journal and 7. cash Column for received from Trade Debtor’s overpayments to trade creditors are covered in this category.
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Two journal entries are needed for the rectification of such errors as one for usual rectification entry and another for self-balancing entry. in the later entry is made to rectify the affected adjustment account. if the error does not affect the total of any journals, only usual correcting anti is needed.
Thus, for the rectifying the error related to transfer of an account from one ledger to another, one transfer entry and to adjustment, entries are needed.
Example of Rectification of Errors under self-balancing system:
Pass journal entries in the books of Jennifer for the following
- the Sales book was found under cast by $20,000
- discount allowed to Hari $1,000 correctly entered in the cash book was not posted to his account.
- the credit balance of $2,000 in Kapil account in the Purchase ledger was to be transferred to his account in sales ledger.
Give journal entries under self-balancing method.
JournalRectification of errors under self-balancing system
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