Question

Question 42.
There was a difference in the Trial Balance of M/s. Jain & Sons, prepared for the year ended 31st March, 2009. The accountant put the difference in Suspense Account.
The following errors were found:
(i) Purchases Return Book total ₹ 400 has not been posted to Ledger Account.
(ii) ₹ 5,100 spent on legal expense for the newly acquired Building was debited to the Building Account as ₹ 1,500.
(iii) A sale of ₹ 6,540 to Rajat has been credited to his account.
Rectify the errors and show the Suspense Account with Nil closing balance.

Answer 1

Entries are given here and the table is attached below.

Explanation:

(i)  Suspense A/c Dr. 400

   To Purchase Return A/c 400

Purchase return account is credited with 400 as it was not posted to purchase return account. Suspense account is debited with 400 to rectify the error.

(ii) Building A/c Dr. 3600

     To Suspense A/c 3600

Building account is debited with the rest of the amount as it was debited with only 1500 instead of 5100. Suspense account is credited with 3600 to rectify the error.

(iii) Rajat A/c Dr. 13080

   To Suspense A/c 13080

Rajat account is debited with twice the amount as it was wrongly credited to his account. Suspense account is credited with 13080 to rectify the error.