Illustrations - Rectification of Errors Commerce Notes | EduRev

Crash Course of Accountancy - Class 11

Created by: Nipuns Institute

Commerce : Illustrations - Rectification of Errors Commerce Notes | EduRev

 Page 1


          
                                                       
 
Ans.  (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account 
which ultimately should become nil.  
 
Q. 8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after 
taking all the reasonable steps to locate the errors. What step should he take to proceed further?  
Ans.  He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense 
Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account 
(if the debit side of the Trial Balance exceeds the credit side).  
 
Q. 9.  A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give 
reason.  
Ans.  No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.  
 
Q. 10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial 
Balance? Give reason.  
Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as 
posting has not been done in both the accounts.  
Q. 11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?  
Ans.  Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will b e 
shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance 
Sheet.  
 
Illustration 1 
Pass the necessary Journal entries to rectify the following errors:  
(i)  Credit sale of Rs.1,700 to Ram was recorded as Rs.7,100.  
(ii)  Credit sale of Rs.1,700 to Mohan was recorded as sales to Krishan.  
(iii)  Credit sale of Rs.1,700 to Asha was recorded as sale to Anshul as Rs.7,100.  
(iv)  Credit sale of Rs.1,700 to Mohan was recorded in the Purchases Book.  
(v)  Credit sale of old machinery to Sohan for Rs.1,700 was entered in the Sales Book for Rs.7,100.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales A/c      ...Dr.  
 To Ram 
(Being the credit sale of Rs.1,700 to Ram recorded as 
Rs.7,100, now rectified) 
 5,400  
5,400 
(ii) Mohan      ...Dr.  
 To Krishan  
(Being the credit sale of Rs.1,700 to Mohan recorded as 
sales to Krishan, now rectified)  
 1,700  
1,700 
(iii) Sales A/c      ...Dr.  
Asha       ...Dr.  
 To Anshul  
(Being the credit sale of Rs.1,700 to Asha recorded as 
sale to Anshul as Rs.7,100, now rectified)  
 5,400 
1,700 
 
 
7,100 
(iv) Mohan      …Dr. 
 To Purchases A/c  
 To Sales A/c 
(Being the credit sale of Rs.1,700 to Mohan recorded in 
the Purchases Book, now rectified)  
 3,400  
1,700 
1,700 
(v) Sales A/c      ...Dr.  
 To Sohan  
 To Machinery A/c 
(Being the credit sale of machinery to Sohan for 
Rs.1,700 entered in the Sales Book as Rs.7,100, now 
rectified)  
 7,100  
5,400 
1,700 
Illustration 2 
Page 2


          
                                                       
 
Ans.  (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account 
which ultimately should become nil.  
 
Q. 8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after 
taking all the reasonable steps to locate the errors. What step should he take to proceed further?  
Ans.  He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense 
Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account 
(if the debit side of the Trial Balance exceeds the credit side).  
 
Q. 9.  A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give 
reason.  
Ans.  No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.  
 
Q. 10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial 
Balance? Give reason.  
Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as 
posting has not been done in both the accounts.  
Q. 11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?  
Ans.  Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will b e 
shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance 
Sheet.  
 
Illustration 1 
Pass the necessary Journal entries to rectify the following errors:  
(i)  Credit sale of Rs.1,700 to Ram was recorded as Rs.7,100.  
(ii)  Credit sale of Rs.1,700 to Mohan was recorded as sales to Krishan.  
(iii)  Credit sale of Rs.1,700 to Asha was recorded as sale to Anshul as Rs.7,100.  
(iv)  Credit sale of Rs.1,700 to Mohan was recorded in the Purchases Book.  
(v)  Credit sale of old machinery to Sohan for Rs.1,700 was entered in the Sales Book for Rs.7,100.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales A/c      ...Dr.  
 To Ram 
(Being the credit sale of Rs.1,700 to Ram recorded as 
Rs.7,100, now rectified) 
 5,400  
5,400 
(ii) Mohan      ...Dr.  
 To Krishan  
(Being the credit sale of Rs.1,700 to Mohan recorded as 
sales to Krishan, now rectified)  
 1,700  
1,700 
(iii) Sales A/c      ...Dr.  
Asha       ...Dr.  
 To Anshul  
(Being the credit sale of Rs.1,700 to Asha recorded as 
sale to Anshul as Rs.7,100, now rectified)  
 5,400 
1,700 
 
 
7,100 
(iv) Mohan      …Dr. 
 To Purchases A/c  
 To Sales A/c 
(Being the credit sale of Rs.1,700 to Mohan recorded in 
the Purchases Book, now rectified)  
 3,400  
1,700 
1,700 
(v) Sales A/c      ...Dr.  
 To Sohan  
 To Machinery A/c 
(Being the credit sale of machinery to Sohan for 
Rs.1,700 entered in the Sales Book as Rs.7,100, now 
rectified)  
 7,100  
5,400 
1,700 
Illustration 2 
          
                                                       
 
Pass the necessary Journal entries to rectify the following errors  
(i)  Furniture purchased on credit from Rohan for Rs.30,000 posted as Rs.3,000.  
(ii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Nishan’s Account.  
(iii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Machinery Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr.  
 To Rohan  
(Being the error in posting of amount, now rectified) 
 27,000  
27,000 
(ii) Nishan     …Dr.  
 To Rohan 
(Being the error in posting to wrong account, now 
rectified) 
 30,000  
30,000 
(iii) Furniture A/c  
 To Machinery A/c  
(Being the error in posting furniture to wrong account, 
now rectified) 
 30,000  
30,000 
 
Illustration 3 
Rectify the following errors:  
(i)  Paid wages for the construction of office debited to Wages Account Rs.20,000.  
(ii)  Paid cartage for the newly purchased furniture Rs.500, posted to Cartage Account.  
(iii) Paid Rs.5,000 for the installation of machinery debited to Wages Account.  
(iv)  Purchased machinery for Rs.50,000 was passed through the Purchases Book.  
(v)  Sold old furniture for 5,000 was passed through the Sales Book.  
(vi)  Paid Rs.2,000 for newly purchased table fan posted to Purchases Account.  
Solution: 
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Building A/c (Note)     ...Dr.  
 To Wages A/c  
(Being the wages paid for construction of office wrongly 
debited to Wages A/c, now rectified) 
 20,000  
20,000 
(ii) Furniture Ac      ...Dr.  
 To Cartage A/c 
(Being the cartage paid for newly purchased furniture 
wrongly posted to Cartage A/c, now rectified) 
 500  
500 
(iii) Machinery A/c     ...Dr.  
 To Wages A/c  
(Being the amount paid for installation of machinery 
wrongly debited to Wages A/c, now rectified) 
 5,000  
5,000 
(iv) Machinery A/c     ...Dr.  
 To Purchases A/c  
(Being the purchase of machinery wrongly passed to 
Purchases Book, now rectified) 
 50,000  
50,000 
(v) Sales A/c      ...Dr.  
 To Furniture A/c  
(Being the sale of old furniture wrongly passed through 
the Sales Book, now rectified) 
 5,000  
5,000 
(vi) Office Equipment A/c    ...Dr.  
 To Purchases A/c  
(Being the purchase of table fan wrongly posted to 
Purchases Account, now rectified) 
 2,000  
2,000 
 
Illustration 4 
Pass the necessary Journal entries to rectify the following errors:  
Page 3


          
                                                       
 
Ans.  (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account 
which ultimately should become nil.  
 
Q. 8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after 
taking all the reasonable steps to locate the errors. What step should he take to proceed further?  
Ans.  He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense 
Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account 
(if the debit side of the Trial Balance exceeds the credit side).  
 
Q. 9.  A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give 
reason.  
Ans.  No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.  
 
Q. 10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial 
Balance? Give reason.  
Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as 
posting has not been done in both the accounts.  
Q. 11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?  
Ans.  Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will b e 
shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance 
Sheet.  
 
Illustration 1 
Pass the necessary Journal entries to rectify the following errors:  
(i)  Credit sale of Rs.1,700 to Ram was recorded as Rs.7,100.  
(ii)  Credit sale of Rs.1,700 to Mohan was recorded as sales to Krishan.  
(iii)  Credit sale of Rs.1,700 to Asha was recorded as sale to Anshul as Rs.7,100.  
(iv)  Credit sale of Rs.1,700 to Mohan was recorded in the Purchases Book.  
(v)  Credit sale of old machinery to Sohan for Rs.1,700 was entered in the Sales Book for Rs.7,100.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales A/c      ...Dr.  
 To Ram 
(Being the credit sale of Rs.1,700 to Ram recorded as 
Rs.7,100, now rectified) 
 5,400  
5,400 
(ii) Mohan      ...Dr.  
 To Krishan  
(Being the credit sale of Rs.1,700 to Mohan recorded as 
sales to Krishan, now rectified)  
 1,700  
1,700 
(iii) Sales A/c      ...Dr.  
Asha       ...Dr.  
 To Anshul  
(Being the credit sale of Rs.1,700 to Asha recorded as 
sale to Anshul as Rs.7,100, now rectified)  
 5,400 
1,700 
 
 
7,100 
(iv) Mohan      …Dr. 
 To Purchases A/c  
 To Sales A/c 
(Being the credit sale of Rs.1,700 to Mohan recorded in 
the Purchases Book, now rectified)  
 3,400  
1,700 
1,700 
(v) Sales A/c      ...Dr.  
 To Sohan  
 To Machinery A/c 
(Being the credit sale of machinery to Sohan for 
Rs.1,700 entered in the Sales Book as Rs.7,100, now 
rectified)  
 7,100  
5,400 
1,700 
Illustration 2 
          
                                                       
 
Pass the necessary Journal entries to rectify the following errors  
(i)  Furniture purchased on credit from Rohan for Rs.30,000 posted as Rs.3,000.  
(ii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Nishan’s Account.  
(iii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Machinery Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr.  
 To Rohan  
(Being the error in posting of amount, now rectified) 
 27,000  
27,000 
(ii) Nishan     …Dr.  
 To Rohan 
(Being the error in posting to wrong account, now 
rectified) 
 30,000  
30,000 
(iii) Furniture A/c  
 To Machinery A/c  
(Being the error in posting furniture to wrong account, 
now rectified) 
 30,000  
30,000 
 
Illustration 3 
Rectify the following errors:  
(i)  Paid wages for the construction of office debited to Wages Account Rs.20,000.  
(ii)  Paid cartage for the newly purchased furniture Rs.500, posted to Cartage Account.  
(iii) Paid Rs.5,000 for the installation of machinery debited to Wages Account.  
(iv)  Purchased machinery for Rs.50,000 was passed through the Purchases Book.  
(v)  Sold old furniture for 5,000 was passed through the Sales Book.  
(vi)  Paid Rs.2,000 for newly purchased table fan posted to Purchases Account.  
Solution: 
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Building A/c (Note)     ...Dr.  
 To Wages A/c  
(Being the wages paid for construction of office wrongly 
debited to Wages A/c, now rectified) 
 20,000  
20,000 
(ii) Furniture Ac      ...Dr.  
 To Cartage A/c 
(Being the cartage paid for newly purchased furniture 
wrongly posted to Cartage A/c, now rectified) 
 500  
500 
(iii) Machinery A/c     ...Dr.  
 To Wages A/c  
(Being the amount paid for installation of machinery 
wrongly debited to Wages A/c, now rectified) 
 5,000  
5,000 
(iv) Machinery A/c     ...Dr.  
 To Purchases A/c  
(Being the purchase of machinery wrongly passed to 
Purchases Book, now rectified) 
 50,000  
50,000 
(v) Sales A/c      ...Dr.  
 To Furniture A/c  
(Being the sale of old furniture wrongly passed through 
the Sales Book, now rectified) 
 5,000  
5,000 
(vi) Office Equipment A/c    ...Dr.  
 To Purchases A/c  
(Being the purchase of table fan wrongly posted to 
Purchases Account, now rectified) 
 2,000  
2,000 
 
Illustration 4 
Pass the necessary Journal entries to rectify the following errors:  
          
                                                       
 
(i)  Credit sale of Rs.5,000 to Ram omitted to he recorded in the books.  
(ii)  Goods (Cost Rs.2,000, Sale Price Rs.2,400) taken by the proprietor were not recorded anywhere.  
(iii)  Goods sold to Hari on credit amounting to Rs.350 were omitted from the accounts although cash received 
subsequently from him stands posted to his credit.  
(iv)  Credit sale of old furniture to Mahesh for Rs.500 omitted to he posted.  
(v)  On 31st March, 2015 goods of the value of Rs.3,000 were returned by Hari and were taken into stock on the same 
date but entry was not passed in the books. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Ram       ...Dr.  
 To Sales A/c  
(Being the credit sale omitted to be recorded, now 
recorded) 
 5,000  
5,000 
(ii) Drawings A/c     ...Dr.  
 To Purchases A/c 
(Being the goods taken away by the proprietor omitted 
to be recorded, now recorded) 
 2,000  
2,000 
(iii) Hari       …Dr.  
 To Sales A/c  
(Being the rectification of goods sold to Hari not 
recorded in the books) 
 350  
350 
(iv) No Journal entry    
(v) Returns Inward A/c     ...Dr.  
 To Hari  
(Being the entry of goods returned by Hari and taken 
into stock omitted from records) 
 3,000  
3,000 
 
Illustration 5 
Pass necessary entries to correct them:  
(i)  Rs.5,000 paid for furniture purchased has been charged to the ordinary Purchase  Account.  
(ii)  Repairs made were debited to the Building Account for Rs.500.  
(iii)  An amount of Rs.1,000 withdrawn by the proprietor for his personal use has been debited to the Trade Expenses 
Account.  
(iv)  Rs.1,000 paid for rent debited to the Landlord’s Account.  
(v)  Salary of Rs.1,250 paid to a clerk, due to him, has been debited to his Personal Account. 
(vi)  Rs.1,000 received from Shah & Co. has been wrongly entered as from Shaw & Co. 
(vii)  Rs.7,000 paid for Computer Printer was debited to Office Expenses Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr. 
 To Purchases A/c  
(Being the correction of wrong debit to Purchases A/c 
for furniture purchased) 
 5,000  
5,000 
(ii) Repairs A/c      …Dr.  
 To Building A/c  
(Being the correction of wrong debit to Building A/c for 
repairs made) 
 600  
600 
(iii) Drawings A/c     …Dr.  
 To Trade Expenses A/c  
(Being the correction of wrong debit to Trade Expenses 
A/c for cash withdrawn by the proprietor for his 
personal use) 
 1,000  
1,000 
(iv) Rent A/c      ...Dr.  
 To Landlord’s Personal A/c  
 1,000  
1,000 
Page 4


          
                                                       
 
Ans.  (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account 
which ultimately should become nil.  
 
Q. 8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after 
taking all the reasonable steps to locate the errors. What step should he take to proceed further?  
Ans.  He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense 
Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account 
(if the debit side of the Trial Balance exceeds the credit side).  
 
Q. 9.  A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give 
reason.  
Ans.  No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.  
 
Q. 10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial 
Balance? Give reason.  
Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as 
posting has not been done in both the accounts.  
Q. 11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?  
Ans.  Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will b e 
shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance 
Sheet.  
 
Illustration 1 
Pass the necessary Journal entries to rectify the following errors:  
(i)  Credit sale of Rs.1,700 to Ram was recorded as Rs.7,100.  
(ii)  Credit sale of Rs.1,700 to Mohan was recorded as sales to Krishan.  
(iii)  Credit sale of Rs.1,700 to Asha was recorded as sale to Anshul as Rs.7,100.  
(iv)  Credit sale of Rs.1,700 to Mohan was recorded in the Purchases Book.  
(v)  Credit sale of old machinery to Sohan for Rs.1,700 was entered in the Sales Book for Rs.7,100.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales A/c      ...Dr.  
 To Ram 
(Being the credit sale of Rs.1,700 to Ram recorded as 
Rs.7,100, now rectified) 
 5,400  
5,400 
(ii) Mohan      ...Dr.  
 To Krishan  
(Being the credit sale of Rs.1,700 to Mohan recorded as 
sales to Krishan, now rectified)  
 1,700  
1,700 
(iii) Sales A/c      ...Dr.  
Asha       ...Dr.  
 To Anshul  
(Being the credit sale of Rs.1,700 to Asha recorded as 
sale to Anshul as Rs.7,100, now rectified)  
 5,400 
1,700 
 
 
7,100 
(iv) Mohan      …Dr. 
 To Purchases A/c  
 To Sales A/c 
(Being the credit sale of Rs.1,700 to Mohan recorded in 
the Purchases Book, now rectified)  
 3,400  
1,700 
1,700 
(v) Sales A/c      ...Dr.  
 To Sohan  
 To Machinery A/c 
(Being the credit sale of machinery to Sohan for 
Rs.1,700 entered in the Sales Book as Rs.7,100, now 
rectified)  
 7,100  
5,400 
1,700 
Illustration 2 
          
                                                       
 
Pass the necessary Journal entries to rectify the following errors  
(i)  Furniture purchased on credit from Rohan for Rs.30,000 posted as Rs.3,000.  
(ii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Nishan’s Account.  
(iii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Machinery Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr.  
 To Rohan  
(Being the error in posting of amount, now rectified) 
 27,000  
27,000 
(ii) Nishan     …Dr.  
 To Rohan 
(Being the error in posting to wrong account, now 
rectified) 
 30,000  
30,000 
(iii) Furniture A/c  
 To Machinery A/c  
(Being the error in posting furniture to wrong account, 
now rectified) 
 30,000  
30,000 
 
Illustration 3 
Rectify the following errors:  
(i)  Paid wages for the construction of office debited to Wages Account Rs.20,000.  
(ii)  Paid cartage for the newly purchased furniture Rs.500, posted to Cartage Account.  
(iii) Paid Rs.5,000 for the installation of machinery debited to Wages Account.  
(iv)  Purchased machinery for Rs.50,000 was passed through the Purchases Book.  
(v)  Sold old furniture for 5,000 was passed through the Sales Book.  
(vi)  Paid Rs.2,000 for newly purchased table fan posted to Purchases Account.  
Solution: 
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Building A/c (Note)     ...Dr.  
 To Wages A/c  
(Being the wages paid for construction of office wrongly 
debited to Wages A/c, now rectified) 
 20,000  
20,000 
(ii) Furniture Ac      ...Dr.  
 To Cartage A/c 
(Being the cartage paid for newly purchased furniture 
wrongly posted to Cartage A/c, now rectified) 
 500  
500 
(iii) Machinery A/c     ...Dr.  
 To Wages A/c  
(Being the amount paid for installation of machinery 
wrongly debited to Wages A/c, now rectified) 
 5,000  
5,000 
(iv) Machinery A/c     ...Dr.  
 To Purchases A/c  
(Being the purchase of machinery wrongly passed to 
Purchases Book, now rectified) 
 50,000  
50,000 
(v) Sales A/c      ...Dr.  
 To Furniture A/c  
(Being the sale of old furniture wrongly passed through 
the Sales Book, now rectified) 
 5,000  
5,000 
(vi) Office Equipment A/c    ...Dr.  
 To Purchases A/c  
(Being the purchase of table fan wrongly posted to 
Purchases Account, now rectified) 
 2,000  
2,000 
 
Illustration 4 
Pass the necessary Journal entries to rectify the following errors:  
          
                                                       
 
(i)  Credit sale of Rs.5,000 to Ram omitted to he recorded in the books.  
(ii)  Goods (Cost Rs.2,000, Sale Price Rs.2,400) taken by the proprietor were not recorded anywhere.  
(iii)  Goods sold to Hari on credit amounting to Rs.350 were omitted from the accounts although cash received 
subsequently from him stands posted to his credit.  
(iv)  Credit sale of old furniture to Mahesh for Rs.500 omitted to he posted.  
(v)  On 31st March, 2015 goods of the value of Rs.3,000 were returned by Hari and were taken into stock on the same 
date but entry was not passed in the books. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Ram       ...Dr.  
 To Sales A/c  
(Being the credit sale omitted to be recorded, now 
recorded) 
 5,000  
5,000 
(ii) Drawings A/c     ...Dr.  
 To Purchases A/c 
(Being the goods taken away by the proprietor omitted 
to be recorded, now recorded) 
 2,000  
2,000 
(iii) Hari       …Dr.  
 To Sales A/c  
(Being the rectification of goods sold to Hari not 
recorded in the books) 
 350  
350 
(iv) No Journal entry    
(v) Returns Inward A/c     ...Dr.  
 To Hari  
(Being the entry of goods returned by Hari and taken 
into stock omitted from records) 
 3,000  
3,000 
 
Illustration 5 
Pass necessary entries to correct them:  
(i)  Rs.5,000 paid for furniture purchased has been charged to the ordinary Purchase  Account.  
(ii)  Repairs made were debited to the Building Account for Rs.500.  
(iii)  An amount of Rs.1,000 withdrawn by the proprietor for his personal use has been debited to the Trade Expenses 
Account.  
(iv)  Rs.1,000 paid for rent debited to the Landlord’s Account.  
(v)  Salary of Rs.1,250 paid to a clerk, due to him, has been debited to his Personal Account. 
(vi)  Rs.1,000 received from Shah & Co. has been wrongly entered as from Shaw & Co. 
(vii)  Rs.7,000 paid for Computer Printer was debited to Office Expenses Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr. 
 To Purchases A/c  
(Being the correction of wrong debit to Purchases A/c 
for furniture purchased) 
 5,000  
5,000 
(ii) Repairs A/c      …Dr.  
 To Building A/c  
(Being the correction of wrong debit to Building A/c for 
repairs made) 
 600  
600 
(iii) Drawings A/c     …Dr.  
 To Trade Expenses A/c  
(Being the correction of wrong debit to Trade Expenses 
A/c for cash withdrawn by the proprietor for his 
personal use) 
 1,000  
1,000 
(iv) Rent A/c      ...Dr.  
 To Landlord’s Personal A/c  
 1,000  
1,000 
          
                                                       
 
(Being the correction of wrong debit to Landlord’s A/c 
for rent paid) 
(v) Salaries A/c      ...Dr.  
 To Clerk’s Personal A/c  
(Being the correction of wrong debit to Clerk’s Personal 
A/c for salaries paid) 
 1,250  
1,250 
(vi) Shaw & Co.      ...Dr.  
 To Shah & Co. 
(Being the correction of wrong credit to Shaw & Co. for 
amount received from Shah & Co.) 
 1,000  
1,000 
(vii) Computer Printer A/c    …Dr.  
 To Office Expenses A/c  
(Being the correction of wrong debit to Office Expenses 
A/c for purchase of computer printer) 
 7,000  
7,000 
 
Illustration 6 
Pass the Journal entries to rectify the following errors:  
(i)  A purchase of goods from Ram amounting to Rs.1,500 has been wrongly passed through the Sales Book.  
(ii)  A credit sale of goods of Rs.1,200 to Ramesh has been wrongly passed through the Purchases Book.  
(iii)  An amount of Rs.2,000 due from Mahesh Chand, which had been written off as a bad debt in previous year was 
unexpectedly recovered and has been posted to the Account of Mahesh Chand.  
(iv)  A cheque for Rs.1,000 received from Manmohan was dishonoured and had been posted to the debit of the Sales 
Return Account.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Purchases A/c     ...Dr.  
Sales A/c      …Dr.  
 To Ram  
(Being the correction of wrong entry in Sales Book of a 
purchase of goods from Ram) 
 1,500 
1,500 
 
 
3,000 
(ii) Ramesh      ...Dr.  
 To Purchases A/c  
 To Sales A/c  
(Being the correction of wrong entry in Purchases Book 
of a credit sale of goods to Ramesh) 
 2,400  
1,200 
1,200 
(iii) Mahesh Chand    ...Dr.  
 To Bad Debts Recovered A/c  
(Being the correction of wrong credit to personal 
account in respect of recovery of previously written off 
bad debts) 
 2,000  
2,000 
(iv) Manmohan      …Dr. 
 To Sales Return A/c  
(Being the correction of wrong debit to Sales Return A/c 
for dishonour of cheque received from Manmohan) 
 1,000  
1,000 
 
Illustration 7 
Pass the Journal entries to rectify the following errors detected during preparation of the Trial Balance:  
(i)  Purchases Book is undercast by Rs.1,000.  
(ii)  Wages paid for construction of office debited to Wages Account Rs.20,000.  
(iii)  A credit sale of goods Rs.1,200 to Ramesh has been wrongly passed through the Purchases Book.  
(iv)  Goods purchased for Rs.5,000 were posted as Rs.500 to the Purchases Account.  
(v)  An amount of Rs.2,000 due from Mahesh Chand which had been written off as a bad debt in previous year was 
unexpectedly recovered has been posted to the personal account of Mahesh Chand.  
(vi)  A credit purchase of Rs.1,040 from. Ramesh was passed in the books as Rs.1,400.  
(vii)  Goods (Cost Rs.5,000; Sales Price Rs.6,000) distributed as free samples among prospective customers were not 
recorded anywhere.  
Page 5


          
                                                       
 
Ans.  (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account 
which ultimately should become nil.  
 
Q. 8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after 
taking all the reasonable steps to locate the errors. What step should he take to proceed further?  
Ans.  He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense 
Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account 
(if the debit side of the Trial Balance exceeds the credit side).  
 
Q. 9.  A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give 
reason.  
Ans.  No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.  
 
Q. 10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial 
Balance? Give reason.  
Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as 
posting has not been done in both the accounts.  
Q. 11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?  
Ans.  Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will b e 
shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance 
Sheet.  
 
Illustration 1 
Pass the necessary Journal entries to rectify the following errors:  
(i)  Credit sale of Rs.1,700 to Ram was recorded as Rs.7,100.  
(ii)  Credit sale of Rs.1,700 to Mohan was recorded as sales to Krishan.  
(iii)  Credit sale of Rs.1,700 to Asha was recorded as sale to Anshul as Rs.7,100.  
(iv)  Credit sale of Rs.1,700 to Mohan was recorded in the Purchases Book.  
(v)  Credit sale of old machinery to Sohan for Rs.1,700 was entered in the Sales Book for Rs.7,100.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales A/c      ...Dr.  
 To Ram 
(Being the credit sale of Rs.1,700 to Ram recorded as 
Rs.7,100, now rectified) 
 5,400  
5,400 
(ii) Mohan      ...Dr.  
 To Krishan  
(Being the credit sale of Rs.1,700 to Mohan recorded as 
sales to Krishan, now rectified)  
 1,700  
1,700 
(iii) Sales A/c      ...Dr.  
Asha       ...Dr.  
 To Anshul  
(Being the credit sale of Rs.1,700 to Asha recorded as 
sale to Anshul as Rs.7,100, now rectified)  
 5,400 
1,700 
 
 
7,100 
(iv) Mohan      …Dr. 
 To Purchases A/c  
 To Sales A/c 
(Being the credit sale of Rs.1,700 to Mohan recorded in 
the Purchases Book, now rectified)  
 3,400  
1,700 
1,700 
(v) Sales A/c      ...Dr.  
 To Sohan  
 To Machinery A/c 
(Being the credit sale of machinery to Sohan for 
Rs.1,700 entered in the Sales Book as Rs.7,100, now 
rectified)  
 7,100  
5,400 
1,700 
Illustration 2 
          
                                                       
 
Pass the necessary Journal entries to rectify the following errors  
(i)  Furniture purchased on credit from Rohan for Rs.30,000 posted as Rs.3,000.  
(ii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Nishan’s Account.  
(iii)  Furniture purchased on credit from Rohan for Rs.30,000 posted to Machinery Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr.  
 To Rohan  
(Being the error in posting of amount, now rectified) 
 27,000  
27,000 
(ii) Nishan     …Dr.  
 To Rohan 
(Being the error in posting to wrong account, now 
rectified) 
 30,000  
30,000 
(iii) Furniture A/c  
 To Machinery A/c  
(Being the error in posting furniture to wrong account, 
now rectified) 
 30,000  
30,000 
 
Illustration 3 
Rectify the following errors:  
(i)  Paid wages for the construction of office debited to Wages Account Rs.20,000.  
(ii)  Paid cartage for the newly purchased furniture Rs.500, posted to Cartage Account.  
(iii) Paid Rs.5,000 for the installation of machinery debited to Wages Account.  
(iv)  Purchased machinery for Rs.50,000 was passed through the Purchases Book.  
(v)  Sold old furniture for 5,000 was passed through the Sales Book.  
(vi)  Paid Rs.2,000 for newly purchased table fan posted to Purchases Account.  
Solution: 
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Building A/c (Note)     ...Dr.  
 To Wages A/c  
(Being the wages paid for construction of office wrongly 
debited to Wages A/c, now rectified) 
 20,000  
20,000 
(ii) Furniture Ac      ...Dr.  
 To Cartage A/c 
(Being the cartage paid for newly purchased furniture 
wrongly posted to Cartage A/c, now rectified) 
 500  
500 
(iii) Machinery A/c     ...Dr.  
 To Wages A/c  
(Being the amount paid for installation of machinery 
wrongly debited to Wages A/c, now rectified) 
 5,000  
5,000 
(iv) Machinery A/c     ...Dr.  
 To Purchases A/c  
(Being the purchase of machinery wrongly passed to 
Purchases Book, now rectified) 
 50,000  
50,000 
(v) Sales A/c      ...Dr.  
 To Furniture A/c  
(Being the sale of old furniture wrongly passed through 
the Sales Book, now rectified) 
 5,000  
5,000 
(vi) Office Equipment A/c    ...Dr.  
 To Purchases A/c  
(Being the purchase of table fan wrongly posted to 
Purchases Account, now rectified) 
 2,000  
2,000 
 
Illustration 4 
Pass the necessary Journal entries to rectify the following errors:  
          
                                                       
 
(i)  Credit sale of Rs.5,000 to Ram omitted to he recorded in the books.  
(ii)  Goods (Cost Rs.2,000, Sale Price Rs.2,400) taken by the proprietor were not recorded anywhere.  
(iii)  Goods sold to Hari on credit amounting to Rs.350 were omitted from the accounts although cash received 
subsequently from him stands posted to his credit.  
(iv)  Credit sale of old furniture to Mahesh for Rs.500 omitted to he posted.  
(v)  On 31st March, 2015 goods of the value of Rs.3,000 were returned by Hari and were taken into stock on the same 
date but entry was not passed in the books. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Ram       ...Dr.  
 To Sales A/c  
(Being the credit sale omitted to be recorded, now 
recorded) 
 5,000  
5,000 
(ii) Drawings A/c     ...Dr.  
 To Purchases A/c 
(Being the goods taken away by the proprietor omitted 
to be recorded, now recorded) 
 2,000  
2,000 
(iii) Hari       …Dr.  
 To Sales A/c  
(Being the rectification of goods sold to Hari not 
recorded in the books) 
 350  
350 
(iv) No Journal entry    
(v) Returns Inward A/c     ...Dr.  
 To Hari  
(Being the entry of goods returned by Hari and taken 
into stock omitted from records) 
 3,000  
3,000 
 
Illustration 5 
Pass necessary entries to correct them:  
(i)  Rs.5,000 paid for furniture purchased has been charged to the ordinary Purchase  Account.  
(ii)  Repairs made were debited to the Building Account for Rs.500.  
(iii)  An amount of Rs.1,000 withdrawn by the proprietor for his personal use has been debited to the Trade Expenses 
Account.  
(iv)  Rs.1,000 paid for rent debited to the Landlord’s Account.  
(v)  Salary of Rs.1,250 paid to a clerk, due to him, has been debited to his Personal Account. 
(vi)  Rs.1,000 received from Shah & Co. has been wrongly entered as from Shaw & Co. 
(vii)  Rs.7,000 paid for Computer Printer was debited to Office Expenses Account. 
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Furniture A/c     ...Dr. 
 To Purchases A/c  
(Being the correction of wrong debit to Purchases A/c 
for furniture purchased) 
 5,000  
5,000 
(ii) Repairs A/c      …Dr.  
 To Building A/c  
(Being the correction of wrong debit to Building A/c for 
repairs made) 
 600  
600 
(iii) Drawings A/c     …Dr.  
 To Trade Expenses A/c  
(Being the correction of wrong debit to Trade Expenses 
A/c for cash withdrawn by the proprietor for his 
personal use) 
 1,000  
1,000 
(iv) Rent A/c      ...Dr.  
 To Landlord’s Personal A/c  
 1,000  
1,000 
          
                                                       
 
(Being the correction of wrong debit to Landlord’s A/c 
for rent paid) 
(v) Salaries A/c      ...Dr.  
 To Clerk’s Personal A/c  
(Being the correction of wrong debit to Clerk’s Personal 
A/c for salaries paid) 
 1,250  
1,250 
(vi) Shaw & Co.      ...Dr.  
 To Shah & Co. 
(Being the correction of wrong credit to Shaw & Co. for 
amount received from Shah & Co.) 
 1,000  
1,000 
(vii) Computer Printer A/c    …Dr.  
 To Office Expenses A/c  
(Being the correction of wrong debit to Office Expenses 
A/c for purchase of computer printer) 
 7,000  
7,000 
 
Illustration 6 
Pass the Journal entries to rectify the following errors:  
(i)  A purchase of goods from Ram amounting to Rs.1,500 has been wrongly passed through the Sales Book.  
(ii)  A credit sale of goods of Rs.1,200 to Ramesh has been wrongly passed through the Purchases Book.  
(iii)  An amount of Rs.2,000 due from Mahesh Chand, which had been written off as a bad debt in previous year was 
unexpectedly recovered and has been posted to the Account of Mahesh Chand.  
(iv)  A cheque for Rs.1,000 received from Manmohan was dishonoured and had been posted to the debit of the Sales 
Return Account.  
Solution:  
JOURNAL ENTRIES 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Purchases A/c     ...Dr.  
Sales A/c      …Dr.  
 To Ram  
(Being the correction of wrong entry in Sales Book of a 
purchase of goods from Ram) 
 1,500 
1,500 
 
 
3,000 
(ii) Ramesh      ...Dr.  
 To Purchases A/c  
 To Sales A/c  
(Being the correction of wrong entry in Purchases Book 
of a credit sale of goods to Ramesh) 
 2,400  
1,200 
1,200 
(iii) Mahesh Chand    ...Dr.  
 To Bad Debts Recovered A/c  
(Being the correction of wrong credit to personal 
account in respect of recovery of previously written off 
bad debts) 
 2,000  
2,000 
(iv) Manmohan      …Dr. 
 To Sales Return A/c  
(Being the correction of wrong debit to Sales Return A/c 
for dishonour of cheque received from Manmohan) 
 1,000  
1,000 
 
Illustration 7 
Pass the Journal entries to rectify the following errors detected during preparation of the Trial Balance:  
(i)  Purchases Book is undercast by Rs.1,000.  
(ii)  Wages paid for construction of office debited to Wages Account Rs.20,000.  
(iii)  A credit sale of goods Rs.1,200 to Ramesh has been wrongly passed through the Purchases Book.  
(iv)  Goods purchased for Rs.5,000 were posted as Rs.500 to the Purchases Account.  
(v)  An amount of Rs.2,000 due from Mahesh Chand which had been written off as a bad debt in previous year was 
unexpectedly recovered has been posted to the personal account of Mahesh Chand.  
(vi)  A credit purchase of Rs.1,040 from. Ramesh was passed in the books as Rs.1,400.  
(vii)  Goods (Cost Rs.5,000; Sales Price Rs.6,000) distributed as free samples among prospective customers were not 
recorded anywhere.  
          
                                                       
 
(viii)  Goods worth Rs.1,500 returned by Green and Co. have not been recorded anywhere.  
Solution:  
JOURNAL 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Purchases A/c     ...Dr.  
 To Suspense A/c  
(Being the Purchases Bock undercast, now rectified) 
 1,000  
1,000 
(ii) Building A/c      ...Dr.  
 To Wages A/c  
(Being the wages for construction of building wrongly 
debited to Wages Account, now rectified) 
 20,000  
20,000 
(iii) Ramesh      ...Dr.  
 To Sales A/c  
 To Purchases A/c  
(Being the wrong recording of sales in Purchases Book, 
now rectified) 
 2,400  
1,200 
1,200 
(iv) Purchases A/c     ...Dr. 
 To Suspense A/c  
(Being the short posting in Purchases A/c, now rectified) 
 4,500  
4,500 
(v) Mahesh Chand     ...Dr.  
 To Bad Debts Recovered A/c  
(Being the bad debts recovered wrongly credited to 
Mahesh Chand rectified) 
 2,000  
2,000 
(vi) Ramesh      ...Dr.  
 To Purchases A/c  
(Being the credit purchases of Rs.1,040 was passed in 
the books as Rs.1,400, now rectified) 
 360  
360 
(vii) Free Sample or Advertising A/c  ...Dr.  
 To Purchases A/c  
(Being the distribution of sample recorded) 
 5,000  
5,000 
(viii) Sales Return A/c     ...Dr.  
 To Green and Co.  
(Being the sates return recorded) 
 1,500  
1,500 
 
 
Illustration 8 
Give the Journal entries to rectify the following errors using Suspense Account, where necessary:  
(i)  Goods of the value of Rs.2,000 returned by Mr. Gupta were entered in the Sales Book and posted therefrom to the 
credit of his account.  
(ii)  Goods worth Rs.1,500 bought by the proprietor for his personal use without any payment being made as yet, was 
wrongly entered in the Purchases Book.  
(iii)  A cheque for Rs.500 received from Ashok was dishonoured and has been posted to the debit of Sales Return 
Account.  
(iv)  The total of one page of the Sales Book was carried forward to the next page as Rs.680 instead of Rs.860.  
(v)  An item of Rs.500 relating to Prepaid Insurance Account was omitted to be brought forward from the previous 
year’s books.  
Solution:  
JOURNAL 
Date Particulars  L.F. Dr. (Rs.) Cr.(Rs.) 
(i) Sales Return A/c     ...Dr.  
Sales A/c      ...Dr.  
 To Suspense A/c  
(Being the goods returned wrongly entered in the Sales 
Book, now rectified) 
 2,000 
2,000 
 
 
4,000 
(ii) Drawings A/c     ...Dr.  
 To Purchases A/c  
 1,500  
1,500 
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