Rectifying Journal Entries

To rectify the error of entering the radius applied for 45000 in the purchase book as 46000, we need to make the following journal entry:

Purchase A/c Dr. 1,000
Suspense A/c Cr. 1,000

Explanation:

- The purchase account needs to be debited with 1,000 (45000-46000) to correct the error.
- The suspense account needs to be credited with 1,000 to balance the journal entry.

To rectify the error of not recording the repairs done to the radio, we need to make the following journal entry:

Repairs A/c Dr. 2,500
Cash A/c Cr. 2,500

Explanation:

- The repairs account needs to be debited with 2,500 to record the expenses incurred.
- The cash account needs to be credited with 2,500 as the payment was made in cash.

Suspense Account

Suspense account is a temporary account used to record the difference between the total debits and credits in a trial balance. It is created when there is an error in the accounts and the cause of the error cannot be immediately identified. The suspense account is used to balance the trial balance and to hold the difference until the error is corrected.

In this case, the suspense account will be used to balance the rectifying journal entries. The entries made to the suspense account will be reversed once the error is corrected.

Suspense A/c
Date Particulars Debit Credit
XX/XX/XXXX Purchase A/c 1,000
XX/XX/XXXX Repairs A/c 2,500
XX/XX/XXXX To balance c/d 3,500
3,500 3,500

Explanation:

- The suspense account is debited with 1,000 to record the error in the purchase book.
- The suspense account is credited with 2,500 to record the repairs done to the radio.
- The suspense account is balanced with a credit of 3,500 to hold the difference until the error is corrected.

Repairs ac Dr 2500
Radius ac Dr 45000
To purchase ac 46000
To suspense ac 1500

Is it correct?