Question

purchases book is undercast by 1000

Answer 1

Errors may also be committed in subsidiary books, such as purchases book, sales book, purchases return and sales return books. Common errors in the subsidiary books may be categorized as under:

1. Errors of omission-forgetting to record the entire transaction in the subsidiary books.

2. Overcasting in subsidiary books.

3. Undercasting in subsidiary books.

Errors of complete omission can be rectified by passing the correct entry which was omitted to be passed as the old proverb goes. “It is never too late to mend”. For example, if goods ·returned by Mohan were taken into stock but no entry was passed through books, the rectification of the transaction will be to pass the correct entry for return of goods.

Subsidiary books do not have both the debit and credit sides. They simply have either debit or credit balance. The mistakes in subsidiary books are, therefore, restricted to totals only. Sometimes it may be totaled short (undercast) or totalled more (overcast). The mistake can be rectified by taking into consideration the type and nature of subsidiary book. Errors of undercasting and overcasting in the subsidiary books are discussed in detail as under:

 

Purchases Book

It records credit purchases of goods only. Whenever goods are purchased, purchases account is debited. In all cases of purchases, goods come into the business, so purchases account has to be debited. It is an accepted accounting truth that purchases book has a debit balance. Undercasting purchase book will mean that purchases book has been added short or technically debited short the rectification of the error will be done by debiting purchases account. If the purchases book has been overcast, it will mean that it has been totaled more or debited more. For rectification of this error, purchases account will be credited which will reduce the total of the purchases book. The error affects only one account, i.e., purchases account in both the cases of undercasting or overcasting, so the rectification can be made in the following ways:

 

 

 

Illustration 2. Rectify the following errors:

1. Purchases book was undercast by $ 1,000.

2. Purchases book was overcast by $ 100.

Solution. (a) Without raising suspense account

1. Following posting will be made at the debit side of purchases account.

“To undercast of the purchases book” $ 1,000.

2. Following posting will be made at the credit side of the purchases account.

“By overcast of the purchases book” $ 100.

(b) By raising suspense account:

Answer 2

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➡➡➡➡➡➡➡➡➡➡➡➡➡

Purchase A/c.................Dr.............1000
.... To Suspense A/c....................................1000

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