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Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify the
following errors by passing necessary Journal entries and show Suspense Account.
1. Rs.1,500/- paid for Machinery were debited to Purchase A/c
2. Rs.80/-
from discount column on payment side has not been posted to Party's A/C
3. Total of purchase book added Rs.300/-short
4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-
5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.
(a) What adjustment would be necessary to rectify the error
( b) How would these errors affect the net profit?
( c) write up Suspense a/c?
following errors by passing necessary Journal entries and show Suspense Account.
1. Rs.1,500/- paid for Machinery were debited to Purchase A/c
2. Rs.80/-
from discount column on payment side has not been posted to Party's A/C
3. Total of purchase book added Rs.300/-short
4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-
5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.
(a) What adjustment would be necessary to rectify the error
( b) How would these errors affect the net profit?
( c) write up Suspense a/c?
Most Upvoted Answer
Trial Balance shows excess credit Rs 380/- which is transferred to sus...
Rectification of Errors
To rectify the errors highlighted, the following journal entries should be passed:
1. Machinery Purchase Error
- Debit: Machinery A/c Rs. 1,500
- Credit: Purchases A/c Rs. 1,500
2. Discount Column Error
- Debit: Party's A/c Rs. 80
- Credit: Suspense A/c Rs. 80
3. Purchase Book Shortage
- Debit: Suspense A/c Rs. 300
- Credit: Purchases A/c Rs. 300
4. Sales Book Error
- Debit: Sales A/c Rs. 1,800 (Rs. 4,200 - Rs. 2,400)
- Credit: Suspense A/c Rs. 1,800
5. Dishonoured Cheque Error
- Debit: Allowance A/c Rs. 500
- Credit: Suspense A/c Rs. 500
Adjustment and Net Profit Impact
- Adjustment Required: Each journal entry corrects the respective error, ensuring accurate accounts.
- Net Profit Effect: Errors relating to purchases and sales directly impact the net profit. Overstated purchases decrease profits, while understated sales also lead to a lower profit. The total net effect will need to be calculated after adjustments.
Suspense Account
The Suspense Account summarizes the adjustments made:
| Date | Details | Debit (Rs.) | Credit (Rs.) |
|------------|---------------------------------------|-------------|---------------|
| 01/10/2023 | Balance b/d | 380 | |
| 01/10/2023 | To Machinery Purchase Error | | 1,500 |
| 01/10/2023 | To Discount Column Error | 80 | |
| 01/10/2023 | To Purchase Book Shortage | 300 | |
| 01/10/2023 | To Sales Book Error | | 1,800 |
| 01/10/2023 | To Dishonoured Cheque Error | | 500 |
| Total | | 760 | 4,800 |
The closing balance of the Suspense Account will be calculated after adjustments.
To rectify the errors highlighted, the following journal entries should be passed:
1. Machinery Purchase Error
- Debit: Machinery A/c Rs. 1,500
- Credit: Purchases A/c Rs. 1,500
2. Discount Column Error
- Debit: Party's A/c Rs. 80
- Credit: Suspense A/c Rs. 80
3. Purchase Book Shortage
- Debit: Suspense A/c Rs. 300
- Credit: Purchases A/c Rs. 300
4. Sales Book Error
- Debit: Sales A/c Rs. 1,800 (Rs. 4,200 - Rs. 2,400)
- Credit: Suspense A/c Rs. 1,800
5. Dishonoured Cheque Error
- Debit: Allowance A/c Rs. 500
- Credit: Suspense A/c Rs. 500
Adjustment and Net Profit Impact
- Adjustment Required: Each journal entry corrects the respective error, ensuring accurate accounts.
- Net Profit Effect: Errors relating to purchases and sales directly impact the net profit. Overstated purchases decrease profits, while understated sales also lead to a lower profit. The total net effect will need to be calculated after adjustments.
Suspense Account
The Suspense Account summarizes the adjustments made:
| Date | Details | Debit (Rs.) | Credit (Rs.) |
|------------|---------------------------------------|-------------|---------------|
| 01/10/2023 | Balance b/d | 380 | |
| 01/10/2023 | To Machinery Purchase Error | | 1,500 |
| 01/10/2023 | To Discount Column Error | 80 | |
| 01/10/2023 | To Purchase Book Shortage | 300 | |
| 01/10/2023 | To Sales Book Error | | 1,800 |
| 01/10/2023 | To Dishonoured Cheque Error | | 500 |
| Total | | 760 | 4,800 |
The closing balance of the Suspense Account will be calculated after adjustments.
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Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c?
Question Description
Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? 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 Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c?.
Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? 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 Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c?.
Solutions for Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? defined & explained in the simplest way possible. Besides giving the explanation of
Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c?, a detailed solution for Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? has been provided alongside types of Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? theory, EduRev gives you an
ample number of questions to practice Trial Balance shows excess credit Rs 380/- which is transferred to suspense Ac. Rectify thefollowing errors by passing necessary Journal entries and show Suspense Account.1. Rs.1,500/- paid for Machinery were debited to Purchase A/c2. Rs.80/-from discount column on payment side has not been posted to Party's A/C3. Total of purchase book added Rs.300/-short4. A credit purchase Rs.4,200/- entered in Sales Book as Rs.2,400/-5. A cheque of Rs.500/- returned dishonoured was posted to debit of Allowance a/ c .This cheque was received from Shri Joshi.(a) What adjustment would be necessary to rectify the error( b) How would these errors affect the net profit?( c) write up Suspense a/c? tests, examples and also practice CA Foundation tests.
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