Question

wages paid for construction of office building debited to wages account ₹20000.rectify

Answer 1

Correct Entry :

Office Building A/C   Dr    Rs.20,000

    To Cash A/C     RS.20,000

(Being Wages paid for construction of office building)

Wrong Entry :

Wages A/C    Dr    Rs.20,000

     To Cash A/C    Rs.20,000

Rectification Entry :

Office Building A/C   Dr    Rs.20,000

    To Wages A/C        Rs.20,000

(Being wrong entry now rectified)

Answer 2

Answer:

Wages Paid for construction of office is a capital expenditure. Therefore should be debited to Office Building A/c.

Correct Entry:

Office Building A/c -------Dr       20000

        To Cash/ Bank A/c                         20000

(Being Wages paid for construction of office building)

However, the same is treated as revenue expenditure and debited to Wages Account wrongly.

Wrong entry

Wages A/c -------Dr                   20000

        To Cash/ Bank A/c                         20000

(Being Wages paid for construction of office building)

The Mistake Can be rectified by the following;

Rectification entry :

Office Building A/c -------Dr    20000

        To Wages  A/c                                20000

(Being Wages paid for construction of office building)