Question

Question 8.
Following errors are discovered in the books of Sh. Ram Lal. Make the necessary entries to rectify them:
(i) Purchases Journal was undercast by ₹ 2,150.
(ii) ₹ 500 received from K. Krishna was debited to his account.
(iii) An amount of ₹ 3,000 withdrawn by the proprietor of the firm for his personal use was posted to the Travelling Expense Account.
(iv) An amount of ₹ 175 for a credit sale to R. Gopalan correctly entered in the Sales Book, has been debited to his account as ₹ 157.

Answer 1

Each transaction is explained to help you to understand it more clearly.

Explanation:

(i)  Purchase A/c Dr. 2150

        To Suspense A/c 2150

Here we debited the purchase account because it was under cast so we need to debit it to make it equal to the real value of purchase. Suspense account is credited because we could not find the appropriate account for recording the transactions. Once we find the correct account we should credit it to that account.

(ii)  Suspense A/c Dr. 1000

        To Krishna Account 1000

Here we credited krishna with double account because we wrongly debited him so we need to credit him with the double amount to record it correctly. Suspense account is debited as we do not have the complete knowledge of the transaction.

(iii) Drawing A/c Dr. 3000

         To travelling Exp 3000

The amount withdrawn by the proprietor for his personal use is to be debit to drawing account so here we debited drawing account. Travelling expense is to be credited because we wrongly debited it .

(iv) R.Gopalan A/c Dr. 18

        To suspense A/c   18

As the amount is correctly entered in the sales book so there is no need to credit the sales account. We debited gopalan account as we debited it with only  157 instead of 175. Suspense account is credited to balance the journal entry