During the course of an accounting year, an Accountant found a difference in the trial balance. He puts
this difference in a newly opened suspense account,
Following errors were located in the books of account:
Goods purchased from Shiv for Rs 10,000, but entered in sales book.
Received a bill receivable for Rs 18,000 from Ganesh ,but recorded in bills payable book.
An item of Rs 4,000 in respect of purchase returns ,wrongly debited to purchase account.
(iv) An item of Rs 2,000 relating to pre-paid salary account omitted to be brought forward.
(v) Paid Rs 1,000 on account of repair of furniture, but wrongly debited to furniture account.
Rectify the errors and prepare Suspense Account.
Answers
Note: Check both pages...
Answer:
One-sided errors will be rectified by posting to the newly opened suspense account and the balance of the suspense account will be the balancing figure.
Explanation:
- Following are the rectifying entries:
- Purchases a/c dr. 10,000
sales a/c dr. 10,000
to shiv's a/c 20,000
(being rectifying entry passed for wrong entry in the sales book.)
- Bills receivable a/c dr. 18,000
bills payable a/c dr. 18,000
to Ganesh's a/c 36,000
(being rectifying entry passed for wrong recording in bills payable book.)
- Suspense a/c dr. 8000
to purchase a/c 4000
to purchase return a/c 4000
(being rectifying entry passed for the wrong debit to purchase account.)
- Pre-paid salaries a/c dr. 2000
to suspense a/c 2000
(being rectifying entry passed for the omission.)
- Repairs a/c dr. 1,000
to furniture a/c 1,000
(being rectifying entry passed for the wrong debit to furniture account.)
- SUSPENSE ACCOUNT:
Particulars Amount Particulars Amount
Purchases a/c 4,000 difference as per trial
Purchases return a/c 4,000 balance( balancing fig.) 6,000
prepaid salaries a/c 2,000
Total 8,000 8,000