How should corrections in accounts be made?

• A. The reversing entry method
• B. The ruling method
• C. The adjusting method
• D. The accrual method

Answer: (B)

Corrections in accounts are made using the ruling method because it keeps the original entry visible while clearly showing the correction. When you discover a mistake, you draw a single line through the incorrect amount and write the correct figure nearby, often with a brief note and initials. This preserves an audit trail so anyone reviewing the books can see both the original error and how it was fixed. The other methods fit different purposes: reversing entries create a mirror entry in a future period to offset the error, adjusting entries are end-of-period adjustments for accruals/deferrals, and the accrual method deals with when revenues and expenses are recognized, not correcting past ledger mistakes.