Question

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13. Pass Rectification entries and prepare Suspense account:
(a) Bought goods from Hari Rs.500 recorded in sales book but Hari's account is correctly
credited.
(b) Sales of goods to Ram Rs.2100 is credited to him as Rs.1200.
(c) Goods costing Rs.1000 withdrawn by proprietor for personal use were credited to Sales A/c.
(d) Paid rent Rs.2000 to landlord, but Gopal's A/c was debited by Rs.1600.
(e) Repairs to plant Rs.1200 was debited to plant a/c as Rs.3200.
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The opening balance of Suspense A/c is Rs.3100 on Dr. Side.​

Answer 1

Answer:yes

Explanation:

Rectification of entries:

A) credit sales book 500₹ and debit purchases book by 500₹

B) debit Ram account by 1200+2100₹ and do nothing to sales account if it is correctly credited

C) debit sales account by 1000₹ and credit inventory account to 1000₹

D) Gopal is a partner and has his capital in credit balance. So debit another 400₹ from his account

E) Credit plant account by 3200₹ and debit expenses account by 1200₹.

What ever wrong entry is there, reverse the entry and start a fresh entry.

Suspense account:

Since none of the above errors is related to the opening suspense account opening balance of 3100₹, carry it forward to the next years trial balance or else write off suspense account to the part of receivable payments as unrecoverable debt when unsure who the credit customer is or else keep the account open if payment is already received as it is tallying with cash account. But keep open the payments to make amount open until payment is made. So it depends upon the nature of the transaction to decide what to do with a suspense account.