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What will be the effect on Capital a/c after rectifying the following errors :
(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)
(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book
(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. B
(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book
(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. B
- a)Debited with Rs. 2,300
- b)Credited with Rs. 2,300
- c)Debited with Rs. 2,700
- d)Credited with Rs. 3,800
Correct answer is option 'A'. Can you explain this answer?
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What will be the effect on Capital a/c after rectifying the following ...
Effect on Capital Account After Rectification of Errors
When errors in accounting are rectified, they can either increase or decrease the Capital Account. Let's analyze how each error affects the Capital Account.
Error 1: Cycle Purchase Debited to Conveyance A/c
- A cycle was purchased for Rs. 3,000, but it was mistakenly debited to the Conveyance A/c instead of the Fixed Assets A/c.
- This means the Fixed Assets were understated by Rs. 3,000.
- Additionally, depreciation on the cycle is 10%, which amounts to Rs. 300 (10% of Rs. 3,000).
- Thus, the overall effect on Capital = Rs. 3,000 (understated) - Rs. 300 (depreciation) = Rs. 2,700.
Error 2: Wrong Entry in Sales Book
- A credit purchase of goods for Rs. 2,500 was incorrectly recorded in the sales book.
- This results in an overstatement of sales and underreporting of purchases.
- Therefore, this error needs to be rectified by reducing the sales figure by Rs. 2,500.
Error 3: Cash Received Posted to Wrong Account
- Cash of Rs. 1,500 received from Mr. A was posted to Mr. B's account.
- This results in an understatement of Mr. A's account and an overstatement of Mr. B's account.
- The rectification will increase the Capital Account by Rs. 1,500.
Calculation of Total Effect on Capital Account
- From Error 1: Rs. 2,700 (decrease)
- From Error 2: Rs. 2,500 (decrease)
- From Error 3: Rs. 1,500 (increase)
Total Effect on Capital Account:
- Total = Rs. 2,700 (decrease) + Rs. 2,500 (decrease) - Rs. 1,500 (increase) = Rs. 2,300 (decrease)
Thus, the Capital Account will be debited with Rs. 2,300, confirming that the correct answer is option 'A'.
When errors in accounting are rectified, they can either increase or decrease the Capital Account. Let's analyze how each error affects the Capital Account.
Error 1: Cycle Purchase Debited to Conveyance A/c
- A cycle was purchased for Rs. 3,000, but it was mistakenly debited to the Conveyance A/c instead of the Fixed Assets A/c.
- This means the Fixed Assets were understated by Rs. 3,000.
- Additionally, depreciation on the cycle is 10%, which amounts to Rs. 300 (10% of Rs. 3,000).
- Thus, the overall effect on Capital = Rs. 3,000 (understated) - Rs. 300 (depreciation) = Rs. 2,700.
Error 2: Wrong Entry in Sales Book
- A credit purchase of goods for Rs. 2,500 was incorrectly recorded in the sales book.
- This results in an overstatement of sales and underreporting of purchases.
- Therefore, this error needs to be rectified by reducing the sales figure by Rs. 2,500.
Error 3: Cash Received Posted to Wrong Account
- Cash of Rs. 1,500 received from Mr. A was posted to Mr. B's account.
- This results in an understatement of Mr. A's account and an overstatement of Mr. B's account.
- The rectification will increase the Capital Account by Rs. 1,500.
Calculation of Total Effect on Capital Account
- From Error 1: Rs. 2,700 (decrease)
- From Error 2: Rs. 2,500 (decrease)
- From Error 3: Rs. 1,500 (increase)
Total Effect on Capital Account:
- Total = Rs. 2,700 (decrease) + Rs. 2,500 (decrease) - Rs. 1,500 (increase) = Rs. 2,300 (decrease)
Thus, the Capital Account will be debited with Rs. 2,300, confirming that the correct answer is option 'A'.
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What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer?
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What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer?.
What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer?.
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ample number of questions to practice What will be the effect on Capital a/c after rectifying the following errors :(i) Purchase of a cycle for Rs. 3,000 was debited to conveyance A/c (fixed assets are depreciated at 10 %)(ii) Credit purchase of goods from X for Rs. 2,500 was wrongly entered in the sales book(iii) Cash received from Mr. A Rs. 1,500 was posted to the A/c of Mr. Ba)Debited with Rs. 2,300b)Credited with Rs. 2,300c)Debited with Rs. 2,700d)Credited with Rs. 3,800Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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