If a business transaction involving the purchase of Land with cash is erroneously recordedin the books as an increase to Supplies instead of an increase to Land, what will occur:O the "books" will be out of balance and (A) will not equal (L+OE)O Supplies will be under-statedO Supplies will be over-statedO Land will be over-stated

Answered: If a business transaction involving the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If a business transaction involving the purchase of Land with cash is erroneously recorded
in the books as an increase to Supplies instead of an increase to Land, what will occur:
O the "books" will be out of balance and (A) will not equal (L+OE)
O Supplies will be under-stated
O Supplies will be over-stated
O Land will be over-stated

Expert Solution

Step 1

RECTIFICATION OF ERROR

Rectification entries are passed when error or mistake are discovered in accounting records.

Rectification of errors is referred to as the procedure of revising mistakes made in recording transactions. These mistakes can occur while posting entries to ledger accounts, classifying accounts, carrying balance forward, etc.

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