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SSC Financial and Cost Accounting P-1 QUESTION #9623
Question 1
A vehicle repair costing Rs. 5,000 was incorrectly debited to the Vehicle Asset Account instead of the Repairs Expense Account. The rectification entry is:
  • Debit: Vehicle Asset Rs. 5,000; Credit: Repairs Expense Rs. 5,000
  • Debit: Repairs Expense Rs. 5,000; Credit: Vehicle Asset Rs. 5,000✔️
  • Debit: Cash Rs. 5,000; Credit: Repairs Expense Rs. 5,000
  • Debit: Repairs Expense Rs. 10,000; Credit: Vehicle Asset Rs. 5,000; Credit: Cash Rs. 5,000
Correct Answer Explanation
The correct entry should have been Dr. Repairs Expense / Cr. Cash. The incorrect entry posted was Dr. Vehicle Asset / Cr. Cash. The credit was correct; only the debit needs correction. To rectify: remove the incorrect debit from Vehicle Asset (Cr. Vehicle Asset Rs. 5,000) and give the correct debit to Repairs Expense (Dr. Repairs Expense Rs. 5,000).