Question

A cheque of Rs.750 received for loss of stock by fire had been deposited in the proprietor's private bank a/c

Answer 1

Answer:

Drawings A/C Dr

Dr To Insurance A/C

Answer 2

In this question, we are asked to rectify the error and pass the journal for the same.

• Rectification of errors is the process of correcting errors produced in transaction recording. These errors can happen when publishing transactions to ledger accounts, categorizing accounts, carrying over balances, etc.
• An accountant creates the accounts, and a person is likely to make mistakes.
• Errors made when recording and posting to the books. However, these mistakes are discovered over time and should be fixed by implementing remedial
• Journal entry, also referred to as a correction of errors.

• Error done by the accountant is that he has received a cheque for loss of stock by fire and he has transferred to the proprietor's private bank account.
• Rectification will be-

Cheque in hand A/C DR 750

             To Proprietor's Bank A/C 750

(Being error rectified)

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