Question 43.
Give the Journal entries to rectify the following errors:
(i) Purchases Book was overcast by ₹ 1,000.
(ii) Installation charges on new machinery purchased ₹ 500 were debited to Sundry Expenses Account as ₹ 50.
(iii) Radhey Shyam returned goods worth ₹ 500 which was entered in the Purchases Return Book.
(iv) Goods taken by the proprietor for ₹ 5,000 have not been entered in the books at all.
Answers
Answer:
Date Particulars. L.F. debit.(Rs.) credit.(Rs.)
(I) Purchases A/c. Dr. 1000
To suspense A/c. 1000
(2). Machinery A/c Dr. 500
To sundry debtors A/c. 50
To suspense A/c. 450
(3). Radhey Shyam A/c. Dr. 500
To Purchases return A/c. 500
( goods returned by Radhey Shyam)
(4). Drawings A/c. Dr. 5000
To purchases A/c. 5000
(goods taken by proprietor)
Every entry is explained to help you better understanding.
Explanation:
(i) Suspense A/c Dr. 1000
To Purchase A/c 1000
Here we debited the suspense account because the reason for overcast is not known to us . Purchase account is credited as it was overcast.
(ii) Machinery A/c Dr. 500
To S. Expenses A/c 50
To suspense A/c 450
Here we debited the machinery account because the installation charges of a machine is to be debited to the machine account as it was added to the cost of machinery. Sundry expenses is credited as it was wrongly debited. Suspense account is credited with the balance amount.
(iii) Purchase Return A/c Dr. 500
Sales return A/c Dr. 500
To Radhey Shyam A/c 1000
Here we debited the purchase return account as it needs to be debited. Sales return is debited because it was wrongly credited. Radhey shyam Account is credited with the double amount ones because it was wrongly debited as purchase returns and once to make the correct entry.
(iv) Drawings A/c Dr. 5000
to purchase A/c 5000
When proprietor withdraws goods for its personal use drawing account is to be Debited. Purchase account is credited as it has been debited before when we purchase the goods.