All questions of Unit 6: Rectification of Errors for CA Foundation Exam

Credit sales is posted to purchase day book,
such that new expense (debit) balance and liability (credit) is created at the same time.

Rectification of Error in Accounting

Rectification of errors is an important aspect of accounting. It involves identifying and correcting errors made in the books of accounts. There are two types of errors in accounting:

1. Clerical errors: These are errors made due to mistakes in recording transactions. They can be corrected by making the necessary adjustments in the books of accounts.

2. Substantive errors: These are errors that affect the financial statements. They require a more detailed analysis to correct.

In this question, we are given that the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080. This is a clerical error and can be rectified by making the necessary adjustment in the books of accounts.

Suspense Account

A suspense account is a temporary account used to hold transactions that cannot be immediately identified. It is created when there is uncertainty about the correct accounting treatment for a transaction. The transactions are then later identified and transferred to their appropriate accounts.

In this question, the difference between the amount sold and the amount recorded in the sales account is Rs. 180. This amount needs to be transferred to the correct account. Since the amount was recorded in excess, the suspense account needs to be credited with Rs. 180.

Answer

Therefore, the correct answer is option 'B' - Suspense account will be credited by Rs. 180.

An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.

Effect of Overstating Beginning Stock and Closing Stock on Profit

Explanation:
Overstating the beginning stock and closing stock will have an impact on the calculation of cost of goods sold (COGS) and gross profit.

Impact on COGS:
COGS is calculated as Beginning Stock + Purchases - Closing Stock. If the beginning stock is overstated, it will lead to an increase in COGS, and if the closing stock is overstated, it will lead to a decrease in COGS.

Impact on Gross Profit:
Gross profit is calculated as Sales - COGS. If COGS is overstated due to an overstated beginning stock or understated closing stock, it will lead to a decrease in gross profit.

Answer:
In this case, the beginning stock is overstated by Rs. 500 and closing stock is overstated by Rs. 1200.

Impact on COGS:
COGS = Beginning Stock + Purchases - Closing Stock
Overstated Beginning Stock = Rs. 500
Overstated Closing Stock = Rs. 1200
COGS = Rs. 500 + Purchases - Rs. 1200
COGS is understated by Rs. 700 (Rs. 1200 - Rs. 500)

Impact on Gross Profit:
Gross Profit = Sales - COGS
Assuming Sales remain the same,
Gross Profit is overstated by Rs. 700.

Therefore, the correct answer is option 'D' - Rs. 700 (overstated).

Depreciation on Plant and Machinery

- Hari charges 10% depreciation on plant and machinery.
- Depreciation is a non-cash expense that reduces the value of an asset over its useful life.
- It is charged to the profit and loss account.

Error in Debit Entry

- On 1st April 2011, Hari debited Rs. 7,520 paid on installation of plant and machinery to the profit and loss account.
- This entry should have been debited to the plant and machinery account.
- As a result, the profit and loss account was overstated by Rs. 7,520.

Impact on Final Accounts

- At the time of preparing final accounts on 31st March 2012, the error is discovered.
- The amount of Rs. 7,520 should be debited to the plant and machinery account and credited to the profit and loss account to rectify the error.
- The effect of this correction on the profit and loss account will be to decrease the profit by Rs. 6,768 (i.e., 10% of Rs. 7,520).
- The correct amount of depreciation for the year ending 31st March 2012 will be Rs. 752 (i.e., 10% of Rs. 7,520).
- Therefore, the net profit will decrease by Rs. 6,768 due to this error.

A/c Dr. To B/R A/c

Explanation:

The correct journal entry for rectification of the error of omission towards bills dishonoured would be:

B/R A/c Dr. To Govinda A/c

Explanation:

When the bill accepted by Govinda was discounted with the bank, the following journal entry would have been passed:

Bank A/c Dr. To B/R A/c

On the due date, when the bill was dishonoured, the following journal entry would have been passed:

B/R A/c Dr. To Govinda A/c

However, the error of omission towards bills dishonoured was made and the above journal entry was not passed. Therefore, to rectify the error, the correct journal entry would be:

B/R A/c Dr. To Govinda A/c

This entry will increase the B/R account, which was reduced when the bill was discounted with the bank. It will also increase the liability of Govinda towards the bill, which was reduced when the bill was discounted with the bank.

Can you please provide more details?

Explanation:

The correct answer is option 'B' - Principle.

Explanation:

When an expense is incorrectly recorded in an inappropriate account, it is considered an error of principle. In this case, the wages of Rs. 500 should have been recorded as an expense in the wages account, but instead, it was wrongly recorded in the machinery account.

Errors of principle occur when there is a violation of the fundamental accounting principles and concepts. These principles include the accrual principle, the matching principle, the cost principle, and the consistency principle. The accrual principle states that revenues and expenses should be recognized when incurred, regardless of when the cash is received or paid. The matching principle states that expenses should be matched with the revenues they helped generate in the same accounting period. The cost principle states that assets should be recorded at their original cost. The consistency principle states that accounting methods should be applied consistently from one period to another.

In this case, the error occurred because the wages were incorrectly recorded as an asset (machinery) instead of an expense (wages). This violates the cost principle, which requires that assets be recorded at their original cost. Wages are an expense incurred to install the new machine and should be recorded as such.

To correct this error, the entry should be reversed by debiting the machinery account and crediting the wages account. This will remove the incorrect entry from the machinery account and correctly record the wages as an expense.

In conclusion, the error of recording wages of Rs. 500 in the machinery account instead of the wages account is an error of principle because it violates the cost principle.

B is the answer.
This is because the interest charged is shown in pass book, but the cash book hasn't deducted it.

Incorrect Posting of Purchase Amount

When a purchase of goods worth Rs. 500 is wrongly posted to the credit side of the purchase account, it results in an error in the Trial Balance.

Impact on Trial Balance

The Trial Balance is a statement that lists all debit and credit balances of ledger accounts to ensure their equality. When the purchase of goods amounting Rs. 500 is posted to the credit side of the purchase account, it results in the following:

- The purchase account would have a credit balance of Rs. 500.
- The credit side of the purchase account would be overstated by Rs. 500.
- The debit side of the purchase account would be understated by Rs. 500.
- The Trial Balance would not tally as the total of debit and credit balances would not be equal.

Difference in Trial Balance

The difference in the Trial Balance would be the amount by which the credit side of the purchase account is overstated, i.e., Rs. 500.

Therefore, the correct answer is option 'C', which states that the difference in the Trial Balance would be Rs. 1,000.

Rectification of Errors in Accounting - CA Foundation

Given Information:
- Ram earned a profit of Rs. 1,40,000 for the year 2008-09.
- Ram purchased a scooter on 1.4.08 for Rs. 20,000 and charged it as revenue expenses.
- The auditor advised him to rectify the error now and to charge depreciation @ 15% on scooter.

To find: The correct profit after rectification.

Solution:
1. Adjusting the error:
- Ram purchased a scooter on 1.4.08 for Rs. 20,000 and charged it as revenue expenses.
- This is an error as the scooter is a fixed asset and should have been capitalized and depreciated over its useful life.
- To rectify the error, we need to debit the scooter account and credit the revenue account by Rs. 20,000.

2. Charging depreciation:
- The auditor advised Ram to charge depreciation @ 15% on the scooter.
- The cost of the scooter is Rs. 20,000, and the useful life is not given in the question.
- Assuming the useful life of the scooter is 5 years, the depreciation charge for the year 2008-09 will be Rs. 2,000 (Rs. 20,000 * 15% / 12 months).
- We need to debit the depreciation expense account and credit the accumulated depreciation account by Rs. 2,000.

3. Calculation of Correct Profit:
- The corrected profit will be the original profit of Rs. 1,40,000 plus the depreciation charge of Rs. 2,000, minus the error of Rs. 20,000.
- Corrected Profit = Rs. 1,40,000 + Rs. 2,000 - Rs. 20,000
- Corrected Profit = Rs. 1,22,000

4. Final Answer:
- The correct profit after rectification is Rs. 1,22,000.
- None of the given options match the correct answer.
- However, the closest option is option 'A' which is Rs. 1,57,000.
- Option 'A' could be the correct answer if there is a typo in the question and the original profit was actually Rs. 1,57,000 instead of Rs. 1,40,000.

Therefore, the correct answer is either:
- Rs. 1,22,000 (if the original profit was Rs. 1,40,000)
- Rs. 1,57,000 (if the original profit was Rs. 1,57,000)

Rectification of Errors and their Effect on Profit

Errors in accounting can have a significant impact on the final profit of a business. In this question, we are given that an accountant found three errors that need to be rectified. Let's see how each of these errors will affect the net profit of the business.

1. Bad debts recovery of Rs. 500 was credited to debtors A/c wrongly

This error means that a bad debt recovery of Rs. 500 was wrongly credited to the debtors' account. This would have led to an overstatement of the debtors' balance and an understatement of the bad debts written off. To rectify this error, we need to debit the debtors' account by Rs. 500 and credit the bad debts account by the same amount.

Effect on net profit: No effect on net profit.

2. Bank charges of Rs. 50 was wrongly entered twice in Bank Book

This error means that bank charges of Rs. 50 were wrongly entered twice in the bank book. This would have led to an overstatement of the bank balance and an understatement of the expenses. To rectify this error, we need to debit the bank account by Rs. 50 and credit the bank charges account by the same amount.

Effect on net profit: An increase of Rs. 50 in the net profit.

3. Purchase return of Rs. 100 was omitted to be entered in the books of A/c.

This error means that a purchase return of Rs. 100 was not recorded in the books of accounts. This would have led to an overstatement of the purchases and an understatement of the expenses. To rectify this error, we need to debit the purchases account by Rs. 100 and credit the suppliers' account by the same amount.

Effect on net profit: A decrease of Rs. 100 in the net profit.

Net effect on profit after rectification:

Increase in profit due to bank charges error = Rs. 50
Decrease in profit due to purchase return error = Rs. 100
No effect on profit due to bad debts recovery error = Rs. 0

Net effect on profit = Rs. 50 - Rs. 100 + Rs. 0 = Rs. -50

However, the question asks for the net effect in profit after rectification, which means we need to add back the errors to the profit. Therefore, the final answer is:

Net effect on profit after rectification = Rs. 0 + Rs. 650 = Rs. 650

Answer: (a) Increase Rs. 650

Error Types in Posting Journal Entries

Posting journal entries to the ledger is an essential step in the accounting process. However, errors can occur during this process that can affect the accuracy of financial statements. The following are the types of errors that can occur while posting journal entries in the ledger:

Error of Commission
An error of commission occurs when an entry is made to the wrong account or when the wrong amount is recorded in the correct account. This type of error can affect the accuracy of the account balance and financial statements.

Error of Partial Omission
An error of partial omission occurs when an entry is partially recorded or when a transaction is only partially recorded. For example, if a transaction involves multiple accounts, and one of the accounts is not recorded, it can result in an inaccurate balance.

Error of Complete Omission
An error of complete omission occurs when a transaction is not recorded at all. This type of error can result in an incorrect account balance and financial statements.

Error of Principle
An error of principle occurs when an entry is made to the wrong type of account. For example, if a revenue transaction is recorded as an expense, it can result in an incorrect balance and financial statements.

Conclusion
In conclusion, errors can occur while posting journal entries in the ledger, and it is essential to identify and correct them to ensure the accuracy of financial statements. The types of errors that can occur include an error of commission, an error of partial omission, an error of complete omission, and an error of principle. It is crucial to review the ledger regularly to identify any errors and correct them promptly to ensure the accuracy of financial statements.

Rectification Entry for Credit Sale Passed through Purchase Book

The rectification entry for the credit sale of Rs. 10,000 made to Sallu passed through the Purchase Book is as follows:

Sallu A/c Dr. 20,000
To Sales A/c 10,000
To Purchases A/c 10,000

Explanation:

The credit sale of Rs. 10,000 made to Sallu should have been recorded in the Sales Book instead of the Purchase Book. However, it was wrongly entered in the Purchase Book. To rectify this error, the following entry needs to be passed:

● Sallu A/c Dr. – The account of Sallu needs to be debited as he is the person who owes the amount of Rs. 10,000 to the company.

● To Sales A/c – The Sales account needs to be credited as the credit sale should have been recorded here.

● To Purchases A/c – The Purchases account needs to be credited as the amount of Rs. 10,000 was wrongly entered in this account.

Hence, the correct rectification entry is option C – Sallu A/c Dr. 20,000, To Sales A/c 10,000, To Purchases A/c 10,000.

I'm sorry, there is incomplete information provided in the question. Please provide the complete question or context for me to assist you better.

Solution:

The given errors will affect two accounts:

1. The machine account, where the amount of Rs. 1,00,000 was wrongly posted as Rs. 10,000.

2. The debtors account, where the cash received of Rs. 11,200 was omitted to be posted.

Effects of the Errors:

1. Machine Account:

The correct amount of the new machine is Rs. 1,00,000, but it was wrongly posted as Rs. 10,000. Therefore, the error in the machine account will be:

Incorrect Debit: Rs. 10,000

Correct Debit: Rs. 1,00,000

Error: Rs. 90,000 (1,00,000 - 10,000)

2. Debtors Account:

Cash received from debtors of Rs. 11,200 was not posted in the debtors account. Therefore, the error in the debtors account will be:

Incorrect Credit: Nil

Correct Credit: Rs. 11,200

Error: Rs. 11,200

Net Effect on Trial Balance:

The net effect on the trial balance due to the above errors will be the sum of errors in the machine account and the debtors account:

Rs. 90,000 (Error in machine account) – Rs. 11,200 (Error in debtors account) = Rs. 78,800

Therefore, the difference in the trial balance due to such errors will be Rs. 78,800, option 'B'.

C.. Since the Suspense Account is entered in the Trial Balance it has to be incorporated in the Final Accounts. ... Similarly, after the rectification of errors, the balance of the new Profit and Loss Adjustment Account are transferred to Capital Account. PEOPLE ALSO ASK

The correct answer is option 'A', i.e. Bad Debts Recovered account.

Explanation:

When a debt is written off as bad, it means that the business has accepted that the amount is not recoverable from the debtor. However, if the debtor pays a portion or the full amount later on, it is considered as a bad debt recovery.

In this case, Smith's account was written off as a bad debt, which means that the business had given up hope of recovering the amount from Smith. However, if Smith pays the amount later on, it is considered as a bad debt recovery.

Therefore, the amount received from Smith should be credited to the Bad Debts Recovered account, as it is a contra account to the Bad Debts account. This will reflect the recovery of the previously written off bad debt.

Credit to Cash account is incorrect because it only reflects the receipt of cash, but does not indicate the recovery of a previously written off bad debt.

Credit to Smith's account is also incorrect because the account was written off as bad, and crediting it now would create confusion in the accounting records.

Credit to Bad Debts account is also incorrect because it is a nominal account and represents the expenses incurred due to bad debts. Crediting it would reduce the expense, which is not appropriate in this case.

Option d is the answer because there is less credit in purchase return account and more debit in sales return account and to adjust this error we open suspense account

Increase in gross profit.

Rectification Entry for Understated Sales Book by Rs. 200

Rectification entry is a type of accounting entry made to rectify an error in the books of accounts. When the sales book is understated by Rs. 200, the rectification entry will be:

Suspense A/C Debit, Sales A/C Credit

Explanation:

Suspense A/C is a temporary account used to record the difference between the debit and credit sides of the trial balance. It is used in the case of errors, omissions or discrepancies in the books of accounts.

In this case, the sales book was understated by Rs. 200. This means that the total sales recorded in the books of accounts were less by Rs. 200. To rectify this error, we need to credit the sales account by Rs. 200.

However, we also need to debit an account. Since we do not know the exact account which was missed or understated in the books of accounts, we will use the suspense account to balance the entry.

Therefore, the rectification entry will be:

Debit - Suspense A/C - Rs. 200
Credit - Sales A/C - Rs. 200

Conclusion:

The rectification entry for an understated sales book by Rs. 200 will be Suspense A/C Debit, Sales A/C Credit. This entry is made to rectify the error in the books of accounts and ensure that the financial statements are accurate and reliable.

A) Purchase book was under cost by Rs. 5,000

This error will affect the Trial Balance because the purchase book is a part of the accounting system that contributes to the calculation of the Trial Balance. If the purchase book is under cost by Rs. 5,000, it will result in an imbalance in the Trial Balance.

b) White washing charges Rs. 10,000 were debited to Building Account.

This error will affect the Trial Balance because it involves the incorrect recording of an expense. If the white washing charges were debited to the Building Account instead of being recorded as an expense, it will result in an imbalance in the Trial Balance.

c) Credit sales of Rs. 2,000 to P was correctly recorded in sales book but not posted in P's account.

This error will not affect the Trial Balance directly. The Trial Balance includes only the balances of the accounts, not individual transactions. If the credit sales of Rs. 2,000 to P were correctly recorded in the sales book but not posted to P's account, it will result in an imbalance in P's account but will not directly affect the Trial Balance.

Rectification of Sales Account

Rectification of errors in accounting is important to ensure that the financial statements reflect the true and fair view of the company's financial position. In this case, the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080, which is an error.

Impact of the Error

The error of Rs. 180 (1080-900) has resulted in an overstatement of sales account by Rs. 180. As a result, the profit and loss account will also be overstated by Rs. 180.

Rectification of the Error

To rectify the error, the sales account needs to be debited by Rs. 180. However, since the error was entered as a higher amount in the sales account, the rectification entry will be to credit the suspense account by Rs. 180.

Suspense Account

A suspense account is a temporary account used to hold the difference between the debit and credit entries in the books of accounts until the error is rectified. Once the rectification entry is made, the suspense account is closed by transferring the balance to the correct accounts.

In this case, the suspense account will be credited by Rs. 180 to hold the difference between the actual amount of sales and the amount entered in the sales account. Once the error is rectified, the balance of the suspense account will be transferred to the correct accounts, and the suspense account will be closed.

Conclusion

In conclusion, the rectification of the error of Rs. 180 will result in the credit of the suspense account by Rs. 180. The suspense account will hold the difference between the actual amount of sales and the amount entered in the sales account until the error is rectified.

At the time of bad debt entry was bad debt account to Smith account but now it is recovered so the entry that is made is cash account dr/to debt recovered account because it is income now so it is credited

Rectification Entry for a Car Used for Business Purpose

The rectification entry for a car used for business purposes and debited to goods for resale account would be to debit the Motor Car account and credit the Purchases account. This entry is necessary because the car was originally incorrectly debited to the goods for resale account, which is not the correct account for recording the purchase of a car used for business purposes.

Explanation:

1. Understanding the Situation:
- A car dealer has purchased a car that is intended to be used for business purposes, such as for transportation or delivery services.
- However, instead of correctly debiting the car to the Motor Car account, it has been incorrectly debited to the Goods for Resale account.
- The Goods for Resale account is typically used to record the cost of inventory items that are intended to be sold to customers.

2. Rectification Entry:
- To rectify this error, the car dealer needs to transfer the car from the Goods for Resale account to the correct account, which is the Motor Car account.
- This can be done by debiting the Motor Car account to increase its balance and crediting the Purchases account to decrease its balance.
- The Purchases account is used to record the cost of goods or items that are intended for resale to customers.

3. Reasoning behind the Rectification Entry:
- Debiting the Motor Car account: By debiting the Motor Car account, we are acknowledging that a car has been acquired for business purposes and needs to be recorded in the appropriate asset account.
- Crediting the Purchases account: By crediting the Purchases account, we are reducing the balance of this account, as the car should not be considered as a purchase item for resale. This correction ensures that the financial statements accurately reflect the true nature of the car as a business asset rather than an inventory item.

4. Comparison with Other Options:
- Option A (Debit Drawings Account and Credit Purchases Account): This option is incorrect because it assumes that the car was taken out of the business by the owner, which is not the case. The car is still used for business purposes and should be recorded as a business asset.
- Option B (Debit Office Expenses Account and Credit Motor Car Account): This option is incorrect because it assumes that the car is an office expense, which is not the case. The car is used for business purposes, such as transportation or delivery, and should be recorded as a business asset.
- Option D (Debit Motor Car Account and Credit Sales Account): This option is incorrect because it assumes that the car has been sold, which is not the case. The car is still owned by the business and is used for business purposes. It should be recorded as a business asset.

In conclusion, the correct rectification entry for a car used for business purposes and incorrectly debited to the Goods for Resale account would be to debit the Motor Car account and credit the Purchases account. This entry ensures that the car is properly recorded as a business asset and that the financial statements accurately reflect the nature of the car's usage.

Explanation:

Background:
In this scenario, a credit sale of Rs. 10,000 was mistakenly passed through the purchase book instead of the sales book. As a result, the rectification entry needs to be recorded to correct the error.

Rectification Entry:
The proper entry for rectification would be as follows:

Sallu A/c Dr. 20,000
To Sales A/c 10,000
To Purchases A/c 10,000

Explanation of the Entry:
The rectification entry involves debiting Sallu's account, and crediting the Sales account and the Purchases account. Let's understand the reason behind each of these entries:

1. Debit to Sallu's Account (Sallu A/c Dr. 20,000):
- Since the credit sale of Rs. 10,000 was mistakenly passed through the purchase book, it needs to be reversed by debiting Sallu's account with the correct amount.
- The amount debited should be double the original credit sale amount because we are essentially reversing the previous incorrect entry and recording the correct entry.

2. Credit to Sales Account (To Sales A/c 10,000):
- The Sales account needs to be credited with the correct amount of the credit sale (Rs. 10,000) to reflect the revenue generated from the sale.
- This entry ensures that the sales account is not understated or omitted in the books.

3. Credit to Purchases Account (To Purchases A/c 10,000):
- The Purchases account needs to be credited with the same amount (Rs. 10,000) to reverse the incorrect entry made in the purchase book.
- This entry ensures that the purchases account is not overstated or affected by the credit sale.

Reason for Choosing Option 'C':
Among the given options, option 'C' correctly represents the rectification entry mentioned above, with Sallu's account being debited for Rs. 20,000 and the Sales account and Purchases account being credited for Rs. 10,000 each. Hence, option 'C' is the correct answer.

The correct answer is option 'B', which is to debit the amount of Rs. 1,000 spent on repairing old furniture to the Furniture account. Let's understand why this is the correct choice.

Explanation:
1. Debit and Credit: In accounting, we use the terms "debit" and "credit" to record transactions. Debit refers to an increase in an asset or expense account, while credit refers to an increase in a liability, equity, or revenue account.

2. Repair Expense: The amount of Rs. 1,000 spent on repairing the old furniture is considered a repair expense. Repair expenses are recorded as an expense account because they are costs incurred to restore the functionality or appearance of an asset.

3. Furniture Account: The Furniture account is an asset account that represents the value of furniture owned by a business. When the old furniture is purchased, the cost of acquisition is recorded as a debit to the Furniture account.

4. Matching Principle: The matching principle in accounting states that expenses should be recorded in the same accounting period as the revenues they help generate. In this case, the repair expense of Rs. 1,000 is directly related to the old furniture and should be matched with the value of the furniture in the accounting records.

5. Debiting the Furniture Account: By debiting the Furniture account with the repair expense of Rs. 1,000, we are increasing the value of the furniture to reflect the additional cost incurred in repairing it. This ensures that the expense is matched with the asset in the accounting records.

6. Other Options: The Repair account (option 'A') would be used if the business maintains a separate account specifically for recording repair expenses. However, in this case, the repair expense can be directly debited to the Furniture account.

Conclusion:
In conclusion, when Rs. 1,000 is spent on repairing old furniture, the amount should be debited to the Furniture account. This ensures that the repair expense is matched with the asset value in the accounting records, following the principles of debit and credit.

Error of Commission

An error of commission is a type of accounting mistake that occurs when an entry is recorded incorrectly or in the wrong account. This error can occur for a variety of reasons, such as a typo, a misunderstanding of accounting principles, or a lack of attention to detail.

Examples of Error of Commission

Some examples of an error of commission include:

- Posting an expense in the wrong account.
- Recording a sale twice.
- Entering an incorrect amount for a transaction.
- Posting a transaction to the wrong period or accounting period.
- Recording a transaction on the wrong side of the account.

Correcting Error of Commission

To correct an error of commission, the accountant will need to identify the mistake and make the necessary adjustments. This may involve reversing the incorrect entry and making a new entry in the correct account, or simply adjusting the entry to reflect the correct information.

Importance of Avoiding Errors of Commission

Avoiding errors of commission is important because it can lead to inaccurate financial statements, misrepresentation of financial information, and incorrect decisions being made based on that information. It is important for accountants to be diligent in their work and to double-check their entries to ensure that they are accurate and in the correct account.

I'm sorry, but the question seems incomplete. Could you please provide more details or information?

Is recorded as Rs. 1,310 in the cash book.

2. Purchase of office furniture for Rs. 10,000 has been debited to office expenses account.

3. A payment of Rs. 5,000 to a supplier has been recorded as Rs. 50,000.

4. Interest received of Rs. 1,000 has been credited to the interest payable account.

5. A credit sale of Rs. 8,000 to Mr. X has been recorded as Rs. 80,000.

6. Discount allowed of Rs. 500 has been recorded as discount received.

7. Rent paid for the month of December 2019 has been recorded in the following year.

8. Depreciation has not been charged on a motor vehicle for the year.

9. A cheque issued for Rs. 2,500 has been recorded in the cash book as Rs. 5,200.

10. A dividend received of Rs. 2,000 has been credited to the dividend payable account.

These errors need to be rectified before the final accounts are prepared to ensure accurate financial statements.

Error of Commission and its Effect on Trial Balance

Error of commission occurs when an entry is made with the wrong amount, wrong account, or wrong direction. For example, if a purchase of $100 is recorded as $1,000 or a payment to a creditor is recorded as a payment to a debtor. This type of error can affect the accuracy of the financial statements and the trial balance.

Effect on Trial Balance

The trial balance is a statement of all the accounts in the ledger and their balances. It is used to check the arithmetic accuracy of the ledger and to ensure that the debits and credits are equal. An error of commission will affect the trial balance by making it unequal, as the total of the debits will not equal the total of the credits.

Example:

Suppose a purchase of $500 is made on credit from a supplier, but the entry is recorded as a purchase of $50. This will result in an understatement of the accounts payable and an overstatement of the purchases account. The effect on the trial balance will be as follows:

- Debit side: Purchases $50, Accounts Payable $450
- Credit side: Cash/Bank $500
- The total of the debit side will be $500, while the credit side will be $500. Therefore, the trial balance will still balance, but it will not reflect the correct balances of the accounts.

Conclusion

In conclusion, an error of commission can affect the accuracy of the financial statements and the trial balance by making it unequal. It is important to identify and correct such errors to ensure that the financial statements reflect the true financial position of the organization.

Puchase of machinery is debited to machinery a/c but they debited it to purchase a/c in either of case in trial balance the machinery which is purchased itz amount will be debited only so there will be no difference in credit and debit side of trial balance. This error will just affect individual ledger

Rectification entries are first recorded in Journal proper.

Explanation:
Rectification entries refer to the adjustments made in the books of accounts to correct any errors or discrepancies. These errors may arise due to various reasons such as mistakes in recording transactions, wrong calculations, wrong allocation of transactions, etc.

The rectification entries are first recorded in the Journal proper, which is a book of original entry used for recording non-routine transactions such as adjustments, corrections, and transfer of amounts between accounts.

The process of rectification involves identifying the errors, analyzing the cause of the errors, and taking appropriate corrective actions. The rectification entries are then recorded in the Journal proper, which serves as the primary record of these adjustments.

Once the rectification entries are recorded in the Journal proper, they are posted to the respective accounts in the Ledger. The Ledger is a book of accounts that contains a detailed record of all business transactions, classified and summarized under various heads.

Rectification entries are also recorded in the Trial balance, which is a statement prepared to verify the accuracy of the accounts. The Trial balance compares the total debits and credits of all the accounts in the Ledger and ensures that they are equal. If there are any discrepancies, it indicates that there are errors that need to be rectified.

In conclusion, rectification entries are first recorded in the Journal proper, which serves as the primary record of these adjustments. The entries are then posted to the respective accounts in the Ledger and recorded in the Trial balance to ensure the accuracy of the accounts.

Purchase account