2007-10-06 17:59:55 · 2 answers · asked by gaone r 1 in Education & Reference ➔ Words & Wordplay
You have to debit or credit to correct the mistake.
For example, if I own a store and my bookkeeper enters payments as journal entries...if she debits them versus doing a credit (showing profits higher due to the incorrect entry) she must then do credit entries to correct the mistake.
2007-10-06 18:09:01 · answer #1 · answered by Smooch The Pooch 7 · 1⤊ 0⤋
The process of correction is called reversal, if the entire transaction is incorrect. For example, if a payment is charged to a wrong head of account, then a reversal entry is passed to credit the account that was wrongly passed. The contra debit entry for the reversal would the correct head of account to which the payment should have been charged in the first instance.
2007-10-07 02:07:56 · answer #2 · answered by greenhorn 7 · 0⤊ 0⤋