Question

Which formula correctly expresses the full process for passing a rectifying entry when correcting an accounting error?

Options

• Rectifying Entry = Record Only the Correct Entry

• Rectifying Entry = Cancel Wrong Entry + Ignore Correct Entry

• Rectifying Entry = Reverse Wrong Entry + Record Correct Entry

• Rectifying Entry = Repeat Same Entry + Adjust Account Balance

Answer 1

Rectifying Entry = Reverse Wrong Entry + Record Correct Entry

Explanation:

The correct formula is Rectifying Entry = Reverse Wrong Entry + Record Correct Entry. This means you must first nullify the effect of the original mistake and then make the correct entry so that both the debit and credit sides accurately reflect the intended transaction.