Question

Legal Expenses 1,190 paid to Mrs. Neetu was debited to her personal account,​

Answer 1

Answer:

Legal Expenses are of revenue nature and classified under Nominal Account.

Mrs. Neetu account is Natural Person belongs to personal account.

Actual Journal entry to be accounted:

Legal Expenses A/c------------------------Dr            1190

           To Cash/ Bank A/c                                             1190

(Being legal expenses incurred)

Wrong Journal entry accounted:

Mrs. Neetu A/c------------------------Dr                   1190

           To Cash/ Bank A/c                                             1190

(Being legal expenses incurred)

Wrong Journal entry accounted:

Legal Expenses A/c------------------------Dr          1190

           To Mrs. Neetu A/c                                             1190

(Being Rectification entry accounted)

Explanation:

As per business entity concept, all personal and business things are different aspects.