Accounting for Transactions

? Accounting for the Transactions
Recording the transactions represented by adjustments normally would result in the existing balance in the affected ledger accounts to either increase or decrease.
? Transaction
Wages to the extent of Rs. 43,000 are incorrectly recorded as Salaries.
This represents an error of principle whereby an expenditure that was to be debited in a particular account has been debited to another account.
To bring the effect of this transaction into books, the journal entry to rectify this error has to be recorded.
Effect of the Transaction
The effect of the journal entry to be recorded in the above case can be analysed as
(?) From Salaries on the debit side of P/L a/c
The Salaries a/c which already has a debit balance is credited which will result in a decrease in the existing debit balance.
To bring the effect of this transaction, the amount involved in the transaction (Rs. 43,000) is deducted from the Salaries a/c balance (Rs. 1,53,000) shown on the debit side of the “Profit & Loss a/c”.
(+) To Wages on the debit side of Trading a/c
The Wages a/c which already has a debit balance is debited resulting in an increase in the existing debit balance.
To bring the effect of this transaction, the amount involved in the transaction (Rs. 43,000) is added to the Wages a/c balance (Rs. 18,000) shown on the debit side of the “Trading a/c”.
These are the adjustments to be made to bring the affect of the above transaction into the books of accounts.

Accounting & Finance for Banking

Principles & Practices of Banking Module E Pdf

Free
Module E PPB ePDFs available in our android app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app
Learning Sessionshttps://iibf.info
Btech, JAIIB CAIIB and a tutor. Have taken more than 900+ hours online classes with more than 1,25,000 students

Popular

Free Live Classes

spot_img

More from author

JAIIB Mega Mock Test for Free | Principles and Practices of Banking

ppb mock test:- Jaiib Exam 2020 dates will be announced soon for May 2020 by iibf. It is high time for preparing for all...

JAIIB Study Material Principles and Practices of Banking Live Class Previous Year Questions

https://www.youtube.com/watch?v=BG2s7lPiX9A Jaiib Study Material PDF Notes Papers Mock Tests - In this post you can get JAIIB Study Material PDF files as shared by other...

Principles and Practices of Banking – PPB Most important Questions

Hello friends, today in this article by the learning sessions we will share important questions and memory called topics of PPB that is principles...

JAIIB Exam 2022 Syllabus, Dates, Pattern and Fee all Details

JAIIB EXAM Dates 2022 Junior Associate of the Indian Institute of Bankers Exam or JAIIB, as commonly called, is conducted as a career progression exam...