Adobe Scan Aug 29, 2022
Adobe Scan Aug 29, 2022
17.13
tion3 (R
Dectification of Errors of Recording).
necessarVJo
ournal entrie to rectify the following errors:
) A credi
le of 1, 700 to Ram was recorded as 7,100.
lo of 1,700 to Mohan was recorded as sales to Krishan.
A credits a
of 1,700 to Asha was recorded as sale to Anshul as 7,100.
sale of
s a
credit
A
1,700 to Mohan was recorded in the Purchases Boo.
sale of 1,
i tA credit
il
sale
f ol
ofold machinery to Sohan for R 1,700 was entered in the Sales Book
) A credit. it
f o r 7,100.
for
Cashsale
af1,700 to Gaurav was recorded as 7,100
R e c e i v
ble of * 8,100 received from Ravinder was recorded in Bills
a b l
q i )B i I
Payable B o o k .
P a r t i c u l a r s
LF Dr.() Cr.()
Sales A/c Dr 5,400
To Ram
5,400
credit sale of 700 recorded as 7,100, now rectified)
Being the
Mohan
..Dr. 1,700
To Krishan 1,700
Reing the credit sale of R 1,700 to Mohan recorded as sales to Krishan,
nowrectified
Rectifying Entry (Step 4). Net effect of Step 2 and Step 3 will be passed as giveni
the solution.
(6) Error of Posting to Wrong Account:This error is committed when the transactia
is posted to the wrong account. The errors committed may be of the
followingtpes iv)
1. The transaction is posted to the wrong account but in the correct sideandme
correct amount.
2. The transaction is posted to the wrong account in the correct side but witht
Wrong amount. (v)
3. The transaction is posted to the wrong account in the wrong side sowit
anu a
wrong amount.
4. The transaction is posted to the wrong account in the wrong
Correct amount.
siu
H C a t i o no fE T o r s
17.15
ffar
or 7 640 received from Guru
A
c h e q u e
Return Account.
was dishonoured and was posted to tne
n) of Sales
i ) An amount unt of 2,860 due from
Prasad, written
bad in previous year, was off as
,
set
a
is
ge paid
paid fo
purchased and
any expense is incurred in purchasing that
for the purchase of building, freight paid on purchase
,Whe b r o k e r a g e
allation
Account. If by mistake,
the Asset
correct
urn
n o tt h e
pense
E x p e n s e .
Expense Account is debited, an
othe ing tha
crediting that Expense Account and debiting the Asset Account.
h
by e n a s
second-hand asset is purchased and is repaired before bringing it in use,
e c o n d ,
penses incurredfor sale of an asset are debited to Asset Account, i.e., Expense
is not debited.
Account
Errors of Principle do not affect the Trial Balance.
) Old furniture Sold for F 5,000 was passed through the Sales Book.
Solution: RECTIFYING JOURNAL ENTRIES
rd 10r the construction of office should be debited to Building Account because it is a capital expenditure
17.18 Double Entry Book
Keeping-
(d) Errors of Complete Omission: These errors are rectifiedd by
by recor
transaction. These errors do not affect the Trial Balance.recording
ngthe,
CRSE
the omy t
Illustration 7.
Following errors were identified in the books of Prasad. Pass necessary tries
rectify them: e
i)5,000 paid for furniture purchased has been
Account. charged to the ordinary Purcha
(ii) Repairs made debited to the Building Account for 7 500.
were
(iii) An amount of R 1,000 withdrawn by the proprietor for his personal se sbee
debited to the Trade Expenses Account.
(iv)71,000 paid for rent debited to the Landlord's
Account.
(v) Salary of T 1,250 paid to a clerk, has been debited ount.
to his Personal Acou
(ui) 1,000 received from Shah & Co. has been
wrongly entered as fro Shaw& s Account
Repairs A c Dr 500
To Building A/c 500
the
correction of wrong debit to Building Alc for repairs made)
Bein
Drawings ANc
.Dr. 1,000
Trade Expenses
A/c 1.000
To
Beingthe corection of wrong debit to Trade Expenses Ac
for
cash withdrawn by the proprie for his personal use)
lustration 8.
Pass Journal entries to rectify the following errors:
i) A purchase of goods from Ram amounting to 1,500 has been wrongly passed
through the Sales Book.
Acredit sale ofgoods of 7 1,200 to Ramesh has been wrongly passed through the
Purchases Book.
An amount of T 2,000 due from Mahesh, which had been written off as Bad Debt
n previous year, was unexpectedly recovered and has been posted to the personal
account of Mahesh.
A cheque for 7 1,000 received from Manmohan was dishonoured and had been
pOSted to the debit of the Sales Return Account.
. 0 0 paid on account of salary to the cashier Dhawan stands debited to his
Personal Account.
Solution: RECTIFYING JOURNAL ENTRIES
Date
Pariculars L.F. Dr. () Cr. )
Purchases Alc .Dr 1,500
Sales Alc Dr.
To Ram 1,500
(Being purchases wrongly passed through Sales Book, now rectified) 3,000
17.20 Double Entry Book
(i) Ramesh
To Purchases A/
Dr Keepi2A0ng-CBs
To Sales Alc
(Being credit sales wrongly passed through Purchases Book, now rectified)
) Mahesh Dr
To Bad Debts Recovered Alc 2000
(Being the correction of wrong credit to Personal Account
in respect of recovery of previously written off bad debts)
(V) Manmohan ..Dr.
To Sales Return Alc 1000
(Being the correction of wrong debit to Sales Return A/c for
dishonour of cheque received from Manmohan)
() Salaries A/c .Dr.
To Dhawan 5,000
(Being the salaries paid debited to the Personal Account of Dhawan, now rectified)
Illustration 9.
Rectify the following errors:
() Wages paid to the firm's workmen for making certain additions
to madh
amounting to ? 5,500 were posted to Wages Account. machinen
(i) Credit purchase of goods of * 1,500 from Mohan & Co. was not
books although the goods were taken into stock. recorded ininthe
(ii) Goods returned of T 500 by Mohan was entered in the Purchases
(iv) Return of goods of 800 to Sohan was passed through the Sales Return Be
Return Bt
(u) Credit Sale of goods to Sunil amounting to R 5,000 was
of Surmail.
posted to the aco
Solution: RECTIFYING JOURNAL ENTRIES
Date Particulars
LF Dr.) C
Plant and Machinery A/c
..Dr. 5,500
To Wages Alc
550
(Being the wages paid for making certain additions to machinery
wrongly debited to Wages Account, now rectified)
(i) Purchases Alc
To Mohan &Co. .Dr 1,500
(Being the purchase of goods from Mohan &Co.
omitted from books, now recorded)
Purchases Return A/c 500
Dr.
Sales Return Alc
..Dr 500
To Mohan
(Being the rectification of returns from Mohan passed through
Purchases Return Book)
(iV) Sohan 1,600
To Sales Return A/c ...Dr
To Purchases Return ANc
(Being the rectification of Purchases Return to Sohan
Sales Retun Book) passed through
(V Sunil 5,000
To Surmail ..Dr
(Being the sale made on credit to Sunil posted wrongly to the debit
of Surmail, now rectified)
17.21
f E r o r s
t h a N o no
before
Errors after Preparation of the Trial
tion of Errors
ot Balance but
the Final Accounts
p r e p a r a t i o no f , ied
rectifie
after the Trial Balance has been preparer they are
detected
ected after
MhOn
e r r o r sa r
llowing manner:
Errors:
theollowing Two-Sided
Errors not Affecting the Trial Balance or
the
involving
n case
-sided Errors a r e Journal entry without
ctified by passing a
Account
difference is placed in the Suspense agree.
ance. The will appear to
As a result of this, Trial Balance
red without delay. a r e identified
and rectified.
Trial Balance which
still remain in the Account
the errors all One-Sided Errors:
Suspense
is used for rectifying
S e Account the errors, which affect the Trial Balance. Account.
ed for rectifying affect the Trial
Balance a r e not
rectified by Suspense
that affect
Lenrs that do not mind that the
errors
should be kept in
A c c o u n t : It words,
Suspense Account. In other
Disposal of one-sided e r r o r s a r e placed in Suspense
balance, i.e.,
the trial net effect of
one-sided e r r o r s .
credit is
Account is the correct account,
Suspense
the a m o u n t to the debit of the
is credited, in
case,
rectified by placing correct account
Errors are
Account. Similarly,
when
rectified, Suspense
placed in the Suspense Account. And, if all one-sided e r r o r s a r e
stand closed. But
debit is placed in
the Suspense this a c c o u n t should
balance, i.e., Sheet o n the
Aovount should not
be left with any it is taken to the Balance
balance in balance.
Account is not closed, there is a credit
n case, Suspense
the liabilities side if
or
debit balance,
Ssets side if there is a
IMPORTANT NOTE
rectified after transferring
errors a r e
that the
it is presumed Account but before
the preparation
Uness otherwise stated, Balance to the Suspense
eof liference in the Trial
the Final Accounts.
Account:
lustration 10. (2) with Suspense
Account and
Suspense
omec
the following errors: (1) without
short.
been totalled 1,000 not been
recorded anywhere.
alesBook has by Green & Co.,
have
) R 1,500 returned
the supplier,
Ravi.
orth to debit of
2.500 w a s posted
of 7 has been entered in
Ods purchased & Co., of R 10,000
Furr from Gulabpurchased
niture
Purchases Book. not been posted
in his account.
4
17.22 Double Entry Book
Keepino
ing
Solution: CRS
(/) Without Suspense Account:
(i) Since Sales Book has been casted (totalled) short by ? 1,000 s
been credited short by ? 1,000. The correcting entry is to credit Aales Neent h
by 1.000 as "By wrong totalling of the Sales Book...1,000"
the Sales N
(ii) To rectify the omission, Returns Inward Account has to be debitod
ed and the acsm
of Green & Co. credited. The entry:
Returns Inward Alc ...Dr.
1,500
To Green & Co.
(Being the goods retuned by the tirm, previously omitted from the Returns Inward Book)
ii) Ravi has been debited 2,500 instead of being credited. His accounto
be credited by 5,000 to remove the wrong debit and to give the.
The entry will be on the credit side "By error in posting... T 5,000 Creda
(iv) By this error, Purchases Account has been debited by 10,000 wherea
s the da
should have been to the Furniture Account. The rectifying entry
.Dr.
will be:
Furniture Alc 10,000
To Purchases Alc
(Being the correction of the mistake by which Purchases Account
was debited instead of the Furniture Account)
(v) Cash received from Ankit of R 2,500 has not been credited to his account. Ear
rectification of this error, Ankit's Account should be credited as follows:
Dr. ANKIT'S ACcOUNT
Dal
Date Particulars J.F Date Particulars U.F
By Omission of Posting 2
(2) With Suspense Account:
Date Particulars LF.Dr() C
Suspense Alc ..Dr. 1,000
To Sales Alc 100
Being the correction arising from undercasting of Sales Book)
(i) Returns Inward A/c ..Dr. 1,500
1.3
To Green& Co.
(Being the recording of goods returned by Green &Co., a customer)
Suspense Ac .Dr. 5,000
To Ravi Ill
Being the correction of the error by which Ravi were
Pas
debited instead of being credited by 2,500)
Furniture Ac 10,000
(ivV) ..Dr.
To Purchases A/c
(Being the correction of recording purchase of furniture as ordinary purchases)
Suspense Alc 2.500
( Dr 280
To Ankit
(Being the cash received from Ankit, now posted to his account)
17.23
K a t i o no rE T o r s
SUSPENSE ACCOUNT
J.F
C
Particulars Date Particulars J.F
To SalesA c 1,000
By Difference in
& Co 5,000
To
Gupta Trial Balance 8,500
2,500
To Ankit
(Balancing Figure)
8,500 8,500
note that the opening balance
1. One should
in the to the
in the Irial Balance. Suspense count will be equal
difference
question is silent as to whether a Suspense Account has been pened or not, the student
Ifthe
make his assumptior state it and then
should
proceed.
M]ustration 11.
nce of
of aa firm.
firm did mot match and difference was placed in Suspense Account.
Balance
| followin errors were subsequently identified:
h
Sales Book was overcasted by 7 200.
)
Goods sold to M Manohar for 550 was posted as 5,500.
il
Purchases Book was overcasted by R 800.
Purchases Return Book was carried forward as 1,220 instead of 7 1,120.
cu are required to pass the Journal entries for rectification of the above errors.
lustration 12.
th
ournal entries to rectify the following errors, using Suspense Account:
s ofthe value of 2,000 returned by Verma were entered in the Sales Book
Posted therefrom to the credit of his account.
dmount of 3,000 entered in the Sales Return Book has been posted to the
Dlebit of Sharma, who returned the goods.
ofR 2,000 made to Mohan was correctly entered in the Sales Book but
vrongly posted to the debit of Sohan as 200.
Double Entry Book
17.24 Keeping
RECTIFYING JOURNAL ENTRIES
-CBSE
Solution:
Date Particulars L.F. Dr.
..Dr.
(0) Sales Ac
..Dr. 2.000
Sales Retum Alc 2,00
To Suspense Alc
(Being the value of goods
returned by Verma wrongly posted to Sales Account A
now rectified)
and omission of debit to Sales Return Account,
.Dr.
Suspense Ac 6,000
(i)
To Sharma
retumed by
(Being the wrongly debited to Sharma tor goods
him, now rectified)
..Dr. 2,000
() Mohan
To Sohan
To Suspense Ac
(Being the omission of debit to Mohan and wrongly credited
to Sohan for sale of 200, now rectified)
Illustration 13.
Pass the Journal entries to rectify the following errors detected during preparation
the Trial Balance:
() Purchases Book is undercast by 1,000.
(ii) Wages paid for construction of office debited to Wages Account 7 20,000.
(ii) A credit sale of goods 1.200 to Ramesh has been wrongly passed throught
Purchases Book.
(iv) Goods purchased for 7 5,000 were posted as T 500 to the Purchases Account
(u) An amount of 7 2.000 due from Mahesh Chand which had been
written of
a bad debt in previous year was unexpectedly recovered has been postedto
personal of Mahesh Chand.
account
in the books as .
(vi) A credit purchase of F 1,040 from Ramesh was passed
(vi) Goods (Cost 5,000; Sales Price 6,000) distributed as free samples an
prospective customers were not recorded anywhere. here
(viii) Goods worth 7 1,500 returned by Green & Co. have not been recorded anyw
(Delhi2