A sale of Rs. 1, 600 to Kamalnath was posted to Karunanathb) Insurance paid amounting to Rs 250 was posted twice.
c) A sale of Rs 1,500 for old machinery was passed through the sale book.
d) A purchase of Rs. 600 from Kamesh was not passed through the books.
e) Rs. 80, the debit balance on commission account was omitted from the trial
balance.
f) The purchase returns book was undercast by Rs 700.
Answers
Answer:
c) Sales A/C Dr. 1500
To Old Machinery A/C 1500
d) Purchase A/C Dr. 600
To Kamesh 600
e) Commission A/C Dr. 80
To Suspense A/C 80
f) Suspense A/C Dr. 700
To Purchase Return A/C 700
(NOTE :- YOU MUST ALSO RIGHT NARRATIONS IN RECTIFICATION OF ERRORS WHICH YOU MIGHT DO BY YOURSELF)
Given:
Following Errors are found which journal entries are shown in the solution part
To find:
a. Rectifying the journal entries
b. Suspense account
Solution:
The journal entries are as follows
a) Kamalnath A/c Dr Rs 1,600
To Karunanath A/c Rs 1,600
(Being sale to kamalnath was wrongly posted to karunanath is rectified now)
b) Suspense A/c Rs 250
To Insurance A/c Rs 250
(Being Insurance paid is posted twice)
c) Sale A/c Dr Rs 1,500
To Machinery A/c Rs 1,500
(Being sale of machinery wrongly posted to sale book)
d) Purchase A/c Dr Rs 600
To Kamesh A/c Rs 600
(Being purchase to Kamesh is not passed)
e) Commission A/c Dr Rs 80
To Suspense A/c Rs 80
(Being commission was not considered into trial balance)
f) Suspense A/c Dr Rs 700
To Purchase return A/c Rs 700
(Being the purchase return is undercasted is rectified now)
The presentation of the suspense account is shown below:
Suspense Account
To Insurance Rs 250 By Commission Rs 80
To Purchase returns Rs 700 By Balance C/d Rs 830
The accounting errors decrease in profits or increased the losses as the income is not credited for profit and loss account. But when these errors are corrected the effect on the profit and loss accounts would be opposite because extra sales will be plus to the profit and loss account that raised the income due or the losses are decreased.
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