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Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75?
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Sundar found a difference of 270 in the trial balance to prepare final...
Explanation of Errors in Sundar's Accounts:
1. Double posting of March salary:
The salary for the month of March was posted twice, resulting in an overstatement of expenses and understatement of profit. This error led to an excess of 155 in the trial balance.
2. Interest on investment collected by banker:
The interest on investment was collected by the banker and was directly posted in the concerned account through the passbook. However, no entry was made in the bank column of the cash book. This error led to an understatement of cash balance by 75 in the trial balance.
Resolution of Errors:
To rectify these errors, the following steps should be taken:
1. Double posting of March salary:
To correct this error, the following journal entry should be made:
Salary A/c Dr 155
To Suspense A/c 155
This will cancel out the excess posting of salary and transfer the correct amount to the Suspense A/c.
2. Interest on investment collected by banker:
To correct this error, the following journal entry should be made:
Bank A/c Dr 75
To Suspense A/c 75
This will increase the cash balance and transfer the correct amount to the Suspense A/c.
Transfer to Suspense A/c:
Since the difference of 270 was not resolved by correcting the above errors, Sundar transferred this amount to the Suspense A/c. The Suspense A/c is a temporary account used to record any differences or errors that cannot be immediately resolved. This account will be carried forward to the next accounting period, and any necessary adjustments will be made in the future.
Overall, it is important to maintain accurate and up-to-date accounts to avoid errors and discrepancies. Regular checks and reconciliations should be made to ensure that the accounts reflect the true financial position of the business.
1. Double posting of March salary:
The salary for the month of March was posted twice, resulting in an overstatement of expenses and understatement of profit. This error led to an excess of 155 in the trial balance.
2. Interest on investment collected by banker:
The interest on investment was collected by the banker and was directly posted in the concerned account through the passbook. However, no entry was made in the bank column of the cash book. This error led to an understatement of cash balance by 75 in the trial balance.
Resolution of Errors:
To rectify these errors, the following steps should be taken:
1. Double posting of March salary:
To correct this error, the following journal entry should be made:
Salary A/c Dr 155
To Suspense A/c 155
This will cancel out the excess posting of salary and transfer the correct amount to the Suspense A/c.
2. Interest on investment collected by banker:
To correct this error, the following journal entry should be made:
Bank A/c Dr 75
To Suspense A/c 75
This will increase the cash balance and transfer the correct amount to the Suspense A/c.
Transfer to Suspense A/c:
Since the difference of 270 was not resolved by correcting the above errors, Sundar transferred this amount to the Suspense A/c. The Suspense A/c is a temporary account used to record any differences or errors that cannot be immediately resolved. This account will be carried forward to the next accounting period, and any necessary adjustments will be made in the future.
Overall, it is important to maintain accurate and up-to-date accounts to avoid errors and discrepancies. Regular checks and reconciliations should be made to ensure that the accounts reflect the true financial position of the business.
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Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75?
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Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75?.
Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75?.
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Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75?, a detailed solution for Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? has been provided alongside types of Sundar found a difference of 270 in the trial balance to prepare final account he plays the difference to the suspense account which was carried forward to the next year when following errors were discovered salary for the month of March was posted twice 155 interest on investment collected by banker where posted directly in concerned accounts through the passbook but no entry was made in the bank column of cash book 75? theory, EduRev gives you an
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