If the trial balance agrees, it implies that:
(a) There is no error in the books.
(b) There may be two sided errors in the book.
(c) There may be one sided error in the books.
(d) There may be both two sided and one sided errors in the books.
10. If suspense account does not balance off even after rectification of errors it implies that:
(a) There are some one sided errors only in the books yet to be located.
(b) There are no more errors yet to be located.
(c) There are some two sided errors only yet to be located.
(d) There may be both one sided errors and two sided errors yet to be located
11. Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:
(a) Credit sales to Mohan Rs 7,000 were not posted.
(b) Credit purchases from Rohan Rs 9,000 were not posted.
(c) Goods returned to Rakesh Rs 4,000 were not posted.
(d) Goods returned from Mahesh Rs 1,000 were not posted.
(e) Cash paid to Ganesh Rs 3,000 was not posted.
(f) Cash sales Rs 2,000 were not posted.
12. Rectify the following errors assuming that a suspense account was opened.
Ascertain the difference in trial balance.
(a) Credit sales to Mohan Rs 7,000 were posted to the credit of his account.
(b) Credit purchases from Rohan Rs 9,000 were posted to the debit of his account as Rs 6,000.
(c) Goods returned to Rakesh Rs 4,000 were posted to the credit of his account.
(d) Goods returned from Mahesh Rs 1,000 were posted to the debit of his account as Rs 2,000.
(e) Cash sales Rs 2,000 were posted to the debit of sales account as Rs 5,000. 13. Trial balance of Raju showed an excess debit of Rs 10,000. He put the difference to suspense account and discovered the following errors:
(a) Depreciation written-off the furniture Rs 6,000 was not posted to Furniture account Credit sales to Rupam Rs 10,000 were recorded as Rs 7,000. (c) Purchases book undercast by Rs 2,000. (d) Cash sales to Rana Rs 5,000 were not posted. (e) Old Machinery sold for Rs 7,000 was credited to sales account. (f) Discount received Rs 800 from Kanan on playing cash to him was not posted. Rectify the errors and prepare suspense account.
Answers
Answer:
a.
(1) Sales of Rs. 950 to Ram completely omitted from books of account- Complete omission, no affect on trial balance.
(2) Purchases of Rs. 720 from Shyam entered in the purchases journal as Rs. 700- Original entry with wrong amount. Double sided error, hence no affect on trial balance.
(3) Purchases Journal is overcast by Rs. 1,000- Its an error of commission. Single sided error, hence trial balance will have a difference.
(4) Sales returns journal is under cast by Rs. 200- Its an error of commission. Single sided error, hence trial balance will have a difference.
(5) Amount paid to Agarwal wrongly posted to the debit to Minas account- Its an error of posting in wrong account. Hence no affect on trial balance.
(6) Bank overdraft shown under debit column in the Trial Balance- Bank o/d always have a credit balance. This will affect the trial balance.
(7) Sales of Rs. 500 to Sadiq entered in sales journal as sales to Mushtaq- Its an error of posting in wrong account, hence no affect on trial balance.
(8) Wages paid for installation of machinery debited to wages account- Its an error of principle. Will not have any affect on trial balance.
10.
In part [a], the use of the preposition 'in' is incorrect as the subject 'I' is going to pick the motorbike and not riding it. So, 'to' would be the correct replacement of 'in'.
In part [b], the use of the pronoun 'he' is incorrect as the sentence is in first person 'I' and not third person 'he'. Also, the passage has only a single character and that is 'I'. So, "I" should be the correct replacement of 'he'.
In part [c], the use of 'about' is incorrect. "About" should be replaced with 'for' as we 'search for something' and not 'search about something'.
In part [d], 'and' is incorrect. The correct replacement for 'and' would be 'but'. The use of 'but' helps explain the situation more clearly that even though a bank employee helped search for the key; the key was still not found.
11. a.
Trial balance is a statement prepared to check the arithmetical accuracy of transactions recorded in the journal, posted into the ledger and balanced in the ledger accounts. The balance of ledger accounts shows the difference between the total of the debit items and credit items in an account. Personal, real and nominal accounts are considered for preparing the trial balance. Generally, it is prepared at the end of an accounting year. However, it may be prepared at the end of any chosen period, which may be monthly, quarterly, half yearly or annually depending upon when it is required. It helps in the preparation of the financial statements
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