Question

Rectify the following error
a. Return outward book was undercast by Rs.2000
b. Return inward book was overcast by Rs.1000
c. Bills receivable book was overcast by Rs.400​

Answer 1

Answer:

a)Return outward account should be credited by Rs.2000

entry:suspense a/c. Dr 2000

To return outward 2000

b) return inward account is to be credited by Rs.

1000

entry:suspense a/c. Dr 1000

To return inward 1000

c)Bill recevable account is to be credited by Rs.400

entry: suspense account. Dr 400

To B/R a/c. 400

if the rectification is done in next year,

ONLY in entries (a) and (b) PROFIT AND LOSS ADJUSTMENT A/C will be CREDITED