Question

commission of rupees 500 recd from Murthy was credited both to commission account and to Murthy’s account rectify

Answer 1

Answer:

CORRECT ENTRY

Cash A/c Dr 500

To Commission A/C 500

WRONG ENTRY

Suspense A/C Dr 1000

To Commission A/C 500

To Murthy A/C 500

RECTIFICATION ENTRY

Cash A/C Dr 500

Murthy A/C Dr 500

To Suspense A/C 1000

Answer 2

The answer is stated below:

Explanation:

When the commission is received from Murthy, the entry to be recorded is as:

Cash A/c...................................Dr 500

       To Commission A/c...........Cr 500

As the commission is received so cash is coming into the business and any increase in asset is debited. Therefore, the cash account is debited. And the cash is received against commission. So, Commission account is credited.

But the entry which is passed or recorded

Suspense A/c...........................Dr  1000

          To Commission A/c..........Cr   500

           To Murthy A/c.....................Cr  500

Now, the rectification entry would be:

Cash A/c........................Dr 500

Murthy A/c....................Dr 500

        To Suspense A/c.....Cr  1000

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