Rectification of Errors

1.
Show the Journal entries necessary to rectify the following errors detected in
the books of accounts:
(a) A payment of Rs. 2500 for the purchase of an electronic typewriter for
office use has been debited to the Purchase A/c from the Cash Book.
(b) A credit sale of Rs.12700 to the Continental Commercial co. has been
posted to the debit side of Continental Iron & steel co. Ltd. from the
Sales Day Book( Register)
(c) A payment of Rs. 10000 for whitewashing the office rooms( which is
normally done before the Diwali every year) has been debited to the
Buildings A/c .
(d) Rs. 2000 received from Jimmy Banker has been credited to Banker &
Financiers Pvt. Ltd.
(e) A Secretariat Table purchased for the office for Rs. 30000 has been
passed through the Invoice Book( Purchase Day Book)
(f) Salary paid to the Cashier, Mr. Leo Gomes, Rs. 15000 has been debited
to his personal account.
(g) Rs. 4000 withdrawn by the proprietor of the business, Mr. Umang Shah
for his personal use has been debited to Trade Expenses A/c.
(h) Rs. 20000 received as interest on investments has been credited to
Commission Received A/c
Right Entry
entry
(a)

Wrong entry

Rectifying

Office Equip. A/c Dr.2500 Purchase A/c Dr.2500 Office Equipment A/cDr.2500
To Cash A/c 2500
To Cash A/c 2500
To Purchase
2500
(b)
C.C.Co. A/c Dr.
To Sales A/c

12700 C.I.S.Co.Ltd.A/c Dr.12700 C.C.Co.A/c Dr. 12700

12700
To Sales A/c
12700 ToCISCo.Ltd.A/c12700

(c)
Office Mtce.A/c Dr.10000 Office Bldg.A/c Dr. 10000 Office Mtce. A/c Dr10000
To Cash A/c
10000
To Cash A/c
10000 To O.Bldg.A/c
10000
(d)
Cash A/c Dr.
2000
Cash A/c Dr.
2000
Banker Fin.A/c Dr. 2000
To J.BankerA/c 2000
To B.Fin.A/c
2000
To J.Banker
2000

(e)
Office Furn. A/c Dr.30000 Purchase A/c Dr.30000 Office Furn.A/c Dr.30000
To Party
30000
To Party
30000
To Purchase A/c 30000
(f)
Salaries
To Cash

Dr. 15000
15000

L.Gomes
Dr.15000
To Cash
15000

Salaries Dr. 15000

To L.Gomes
15000

(g)
Drawings
To Cash

Dr. 4000
4000

Trade Expenses Dr. 4000 Drawings Dr. 4000

To Cash
4000 To Trade Exp. 4000

(h)
Bank Dr. 20000
To Intt.on Invt 20000

Bank Dr. 20000

to Commn. 20000

Commission Dr.20000
To Intt.on Invt.20000

If Final Accounts had already been drawn up before rectifying these errors the
rectifying entries would have been :

(a)
O.Equip.Dr. 2500
To P&L Adj. 2500
(b)

CCCo Dr. 12700

ToCIS Co. 12700

(c )

P &L Adj. Dr. 10000

To O.Bldg. 10000

(d)

Banker Fin. Dr. 2000

To J.Banker 2000

(e)

O.Furn. 30000

To P & L Adj. 30000

(f)

P & L Adj Dr. 15000

To L.Gomes 15000

(g)

Drawings Dr.4000
To P & L Adj. 4000

(h)

No effect on P &L Adj

as debit ismatched by credit

2.
Rectify
(a)
A sale of goods worth Rs.5000 to Samson & Sundaram Ltd. was entered in the
Purchase Day Book.
(b)
Attorneys Fees(Rs. 10000) for the Title Search of a Building acquired by the
firm was debited to Legal expenses A/c from the Cash Book Bank Column.
(c)
Discount Allowed, Rs. 150
has been wrongly entered in the Discount
Received A/c as Rs. 510
Solution
Right Entry
Wrong Entry
Rectifying Entry
(i)
(when Final Accts not drawn up)
(ii)
(when Final Accts already drawn up)
(a)
S & S Ltd. Dr.5000
Purchases Dr.5000 (i)
S.Crs.
Dr.5000
To Sales
5000
To S.Crs.
5000
S& S Ltd.Dr.5000
To Purchases 5000
To Sales
5000
----------------------------------------------------------------------------------------------------------------------------(ii) S.Crs.
Dr. 5000
S &S Ltd.Dr.5000
To P &L Adj 5000
---------------------------------------------------------------------------------------------------------------------------(b)
Bldg. Dr.
10000 Legal Exp. Dr. 10000 (i) Bldg. Dr.
10000

To Bank
10000
To Bank
10000 To Legal Exp 10000
---------------------------------------------------------------------------------------------------------------------------(ii) Bldg. Dr. 10000
To P &L Adj 10000
--------------------------------------------------------------------------------------------------------------------------------(c)
Cash Dr.

Cash
Dr. x
(i) Discount Allowed Dr.150
Suspense Dr.660
Disc.Alld.Dr.150
To Disc. Rcd 510
Discount received Dr. 510
To Party x+150
To Party
x+150
T0 Suspense
660
--------------------------------------------------------------------------------------------------------------------------------(ii)
P & L Adj
Dr. 660
To Suspense 660
---------------------------------------------------------------------------------------------------------------------------------

3.

The following errors were detected in the books of G. D. Pharma, a solepropietorship firm :
(i)
The Sales Daybook was cast Rs. 500 short.
a. The purchase of an Office Almirah for Rs. 4500 was passed
through the Purchase Day Book
b. Sale of goods worth Rs. 250 to B.Bose was credited to his A/c.
c. Goods worth Rs. 350 taken by the proprietor,G. D. Shah were not
debited to any A/c.
d. Purchase of Stationery Rs. 50 was debited to Office Equipments
A/c.
The Trial balance was agreed by keeping the difference in Suspense A/c.
State which of these items affected the agreement of the Trial balance.
(i),(iii),(iv)
What was the amount in the Suspense A/c ?
Rs.350 Dr.

What would be the correcting journal entries :

(a)
if the Final Accounts have not yet been prepared;
(b)
if the final Accounts have already been drawn up on the basis
of these faulty record

(If the final accounts have not yet been prepared)

Right Entry
(i)
Party Dr.
To Sales

Wrong Entry

x
x

Party Dr.
x
To Sales
x-500
To Suspense 500

Rectifying Entry

Suspense Dr.500
To Sales
500

(ii)
O.Equipmt.Dr 4500
To Cash
4500

Purchase Dr. 4500

To Cash
4500

O.Equipmt.Dr. 4500
To Purchase 4500

(iii)
B.Bose
Dr.
To Sales

250
250

Suspense Dr. 500

To Sales
250
To B.Bose
250

B.Bose Dr. 500

To Suspense 500

(iv)
Drawings Dr.
350
To Purchase
(v)
Stationery Dr.
50
To Cash

350

Suspense Dr. 350

Drawings Dr. 350
To Purchase 350
To Suspense 350

50

O.Equipmt. Dr. 50
To Cash

If Final accounts have already been drawn up

50

Stationery Dr. 50
to O.Equipmt. 50

(i)

Suspense Dr. 500

To P & L Adjtmt 500

(ii)

O.Equipmt Dr.4500
To P&LAdjt
4500

(iii)

B.Bose Dr. 500

To Suspense 500

(iv)

Drawings Dr.350
To Suspense 350

(v)

P&LAdj. Dr.50
To O.Equipt 50