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. Rectify the following errors which are detected after the preparation of Profit & Loss Account. The
Profit was found to be₹ 42,000; Ascertain the correct profit.
(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.
(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.
(d) 2,000 was outstanding on account of wages but was not adjusted.
(e) Return outward Book was overcast by 600.
[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]
show the journal entry?
Profit was found to be₹ 42,000; Ascertain the correct profit.
(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.
(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.
(d) 2,000 was outstanding on account of wages but was not adjusted.
(e) Return outward Book was overcast by 600.
[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]
show the journal entry?
Most Upvoted Answer
. Rectify the following errors which are detected after the preparatio...
Journal Entry to Rectify Errors in Profit & Loss Account:
1. Correction of Credit Sales to Parimal:
- Debit: Sales Account 180
- Credit: Parimal's Account 180
2. Correction of Overstatement in Cash Book:
- Debit: Cash Book 200
- Credit: Suspense Account 200
3. Correction of Credit Purchase from Suresh:
- Debit: Suresh's Account 180
- Credit: Purchase Account 180
4. Adjustment for Outstanding Wages:
- Debit: Wages Account 2,000
- Credit: Suspense Account 2,000
5. Correction of Overcast in Return Outward Book:
- Debit: Suspense Account 600
- Credit: Return Outward Account 600
Explanation:
- The errors identified in the Profit & Loss Account are rectified through journal entries to ensure accurate financial reporting.
- Each entry corrects a specific error made in the preparation of the account, such as incorrect recording of sales, purchases, cash receipts, outstanding wages, or returns.
- The Suspense Account is used to temporarily hold the discrepancies until they are properly adjusted, balancing the accounts in the process.
- By making these corrections, the true profit for the year can be ascertained as ₹39,400 after adjusting for the identified errors.
1. Correction of Credit Sales to Parimal:
- Debit: Sales Account 180
- Credit: Parimal's Account 180
2. Correction of Overstatement in Cash Book:
- Debit: Cash Book 200
- Credit: Suspense Account 200
3. Correction of Credit Purchase from Suresh:
- Debit: Suresh's Account 180
- Credit: Purchase Account 180
4. Adjustment for Outstanding Wages:
- Debit: Wages Account 2,000
- Credit: Suspense Account 2,000
5. Correction of Overcast in Return Outward Book:
- Debit: Suspense Account 600
- Credit: Return Outward Account 600
Explanation:
- The errors identified in the Profit & Loss Account are rectified through journal entries to ensure accurate financial reporting.
- Each entry corrects a specific error made in the preparation of the account, such as incorrect recording of sales, purchases, cash receipts, outstanding wages, or returns.
- The Suspense Account is used to temporarily hold the discrepancies until they are properly adjusted, balancing the accounts in the process.
- By making these corrections, the true profit for the year can be ascertained as ₹39,400 after adjusting for the identified errors.
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. Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry?
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. Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry?.
. Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry?.
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. Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry?, a detailed solution for . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? has been provided alongside types of . Rectify the following errors which are detected after the preparation of Profit & Loss Account. TheProfit was found to be₹ 42,000; Ascertain the correct profit.(a) A credit sales of 970 to Parimal was passed through the Sales Day Book as 790. (b) Addition of receipts side of the Cash Book was overstated by₹ 200.(c) A credit purchase of 1,530 from Suresh was passed through the Purchase Day Book as 1,350.(d) 2,000 was outstanding on account of wages but was not adjusted.(e) Return outward Book was overcast by 600.[Ans. Opening Dr. Balance of Suspense A/c 400, Correct Profit for the year 39,400.]show the journal entry? theory, EduRev gives you an
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