Question

Rectify the following errors cash purchases 12000 from siddhant traders was debited to siddhant trader account

Answer 1

Siddhant Traders A/c Dr. 12000

To Cash A/c 12000

Answer 2

The answer is explained in detail below.

Explanation:

The entry which was wrongly made is :

Siddhart Trader A/c Dr. 12,000

            To cash A/c            12,000

The correct entry which should me made is:

Purchase A/c Dr. 12,000

        To Cash           12,000

Entry to rectify the error :

Purchase A/c Dr.       12000

    To Siddhart trader A/c 12000

We Debited the Purchase account as it was purchase and it was our expenses and we debit all expenses and losses. Siddhart trader account is credit as it was wrongly debited.