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Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S?
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Goods bought from a merchant for 550 had been posted to the credit of ...
It appears that there are a few errors in the accounting records of this business. These errors can impact the accuracy and reliability of the financial statements, and can potentially lead to incorrect decision-making. Here are some possible ways to correct these errors:
(a) To correct the error in the purchase ledger, the business can make a journal entry to adjust the account. The journal entry would be:
Debit: Purchase Ledger (for the correct amount of 550)
Credit: Purchase Ledger (for the incorrect amount of 5,500)
(b) To correct the error in the sales return book, the business can make a journal entry to adjust the account. The journal entry would be:
Debit: Sales Return (for the correct amount of 1,062)
Credit: Sales Return (for the incorrect amount of 1,062)
(c) To correct the error in the sales book, the business can make a journal entry to adjust the account. The journal entry would be:
Debit: Sales (for the correct amount of 26,000)
Credit: Sales (for the incorrect amount of 26,000)
(d) To correct the error in the schedule of outstanding debt, the business can make a journal entry to adjust the account. The journal entry would be:
Debit: Receivables (for the correct amount of 76,000)
Credit: Receivables (for the incorrect amount of 76,000)
It is important for the business to identify and correct any errors in their accounting records to ensure that their financial statements are accurate and reliable. This can help the business to make informed decisions and manage its finances effectively.
This question is part of UPSC exam. View all Commerce courses
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Goods bought from a merchant for 550 had been posted to the credit of ...
Errors in Accounting Records:
1. Overposting of Goods Purchased:
- Goods purchased from a merchant for 550 have been incorrectly posted as 5,500 in the credit column of the account.
- This error results in an overstatement of the merchant's account balance by 4,950 (5,500 - 550).
- The correct amount should be posted to rectify this error.
2. Incorrect Posting of Sales Return:
- An item worth 1,062, entered in the Sales Return Book, has been mistakenly posted to the debit of the customer who returned the goods.
- This error results in an incorrect reduction of the customer's account balance by 1,062.
- The correct amount should be posted to the credit of the customer's account to rectify this error.
3. Misposting of Plant Sales:
- Sundry items of plant sold for 26,000 have been entered in the Sales Book, but the total of the Sales Book has been posted to the Sales Account.
- This error results in an omission of the plant sales from the Sales Account, leading to an understatement of sales by 26,000.
- The correct amount should be posted to the credit of the Sales Account and debited to the Plant Sales Account to rectify this error.
4. Omission of Customer's Outstanding Balance:
- An amount of 76,000 owed by a customer has been omitted from the schedule of Sundry Debtors.
- This error results in an understatement of the total accounts receivable by 76,000.
- The correct amount should be included in the schedule of Sundry Debtors to rectify this error.
Rectification Steps:
1. Rectifying Overposting of Goods Purchased:
- Debit the Merchant's Account by the correct amount of 550.
- Credit the Purchase Account by the same amount of 550.
2. Rectifying Incorrect Posting of Sales Return:
- Credit the Customer's Account by the correct amount of 1,062.
- Debit the Sales Return Account by the same amount of 1,062.
3. Rectifying Misposting of Plant Sales:
- Debit the Sales Account by the correct amount of 26,000.
- Credit the Plant Sales Account by the same amount of 26,000.
4. Rectifying Omission of Customer's Outstanding Balance:
- Include the amount of 76,000 in the schedule of Sundry Debtors.
- Debit the Customer's Account by the same amount of 76,000.
Impact of Rectification:
- After rectifying these errors, the accounting records will reflect the correct amounts and balances.
- The overstatement and understatement of various accounts will be corrected, ensuring accuracy in financial reporting.
- The corrected figures will provide a true and fair view of the business's financial position and performance.
- Users of the financial statements, such as investors, creditors, and management, will
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Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S?
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Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S?.
Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S?.
Solutions for Goods bought from a merchant for 550 had been posted to the credit of his account as 5.500. (6) An item of 1,062 entered in the Sales Return Book has been posted to the debit of the customer who returned the goods. (c) Sundry items of plant sold for 26,000 had been entered in the Sales Book, the total of which book has been posted to Sales Account. (d) 76,000 owing by a customer had been omitted from the schedule of S? in English & in Hindi are available as part of our courses for Commerce.
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