Multiple choice

An invoice of purchase from Ajit for Rs. 20,000 was not recorded in the books. Which is the correct rectifying entry, if the error is found after the preparation of the Balance Sheet?

  1. Dr. purchase A/c and Cr. cash A/c

  2. Dr. purchase A/c and Cr. Ajit A/c

  3. Dr. purchase A/c and Cr. suspense A/c

  4. Dr. profit and loss adjustment A/c and Cr. Ajit A/c
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

No record of purchase  means increase in the profit, so to adjust the profit  we need to open the profit and loss adjustment A/c and the party's a/c is not affected. So there is no need to record it through party's a/c.

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