Recording of Transactions - 2 — Account STD 11 Commerce — Question

Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is done in the ledger?

Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors:

1. In the sales book for the month of January total of page 2 was carried forward to page 3 as ₹ 1,000 instead of ₹ 1200 and total of page 6 was carried forward to page 7 as ₹ 5,600 instead of ₹ 5,000.
2. Wages paid for installation of machinery ₹ 500 was posted to wages account as ₹ 50.
3. Machinery purchased from R & Co. for ₹ 10,000 on credit was entered in Purchase Book as ₹ 6,000 and posted there from to R & Co. as ₹ 1,000.
4. Credit sales to Mohan ₹ 5,000 were recorded in Purchases Book.
5. Goods returned to Ram ₹ 1,000 were recorded in Sales Book.
6. Credit purchases from S & Co. for ₹ 6,000 were recorded in sales book. However, S & Co. was correctly credited.
7. Credit purchases from M & Co. ₹ 6,000 were recorded in Sales Book as ₹ 2,000 and posted there from to the credit of M & Co. as ₹ 1,000.
8. Credit sales to Raman ₹ 4,000 posted to the credit of Raghvan as ₹ 1,000.
9. Bill receivable for ₹ 1,600 from Noor was dishonoured and posted to debit of Allowances account.
10. Cash paid to Mani ₹ 5,000 against our acceptance was debited to Manu.
11. Old furniture sold for ₹ 3,000 was posted to Sales account as ₹ 1,000.
12. Depreciation provided on furniture ₹ 800 was not posted.
13. Material ₹ 10,000 and wages ₹ 3,000 were used for construction of building. No adjustment was made in the books. Rectify the errors and prepare suspense to ascertain the difference in trial balance.

Rectify the following errors which are detected before preparation of the Trial Balance:
i. Sale to Prakash ₹ 50,000 posted to his account as ₹ 5,000 .
ii. Sale to Prakash ₹ 30,000 debited to his account as ₹ 3,000 .
iii. Sale to Prakash ₹ 20,000 credited to his account as ₹ 2,000 .
iv. Sale to Ravi ₹ 5,600 posted to his account as ₹ 6,500 .
v. Purchases of ₹ 8,755 from Nitin posted to his account as ₹ 5,578 .
vi. Purchases of ₹ 6,580 from Nitin posted to his account as ₹ 8,560 .
vii. Cash sale to Abhi of ₹ 30,000 posted as ₹ 3,000 .
fiii. Debit balance of ₹ 5,000 was carried forward as a credit balance in Ritesh's Account.
ix. Credit purchase of furniture ₹ 30,000 from Rohit was posted as ₹ 3,000 .

Discuss the concept-based on the premise ‘do not anticipate profits but provide for all losses’.

Rectify the following errors which were detected before preparing the Trial Balance:

1. Purchase book has been overcast by ₹ 1,000.
2. Purchase from Ram ₹ 20,000 has been omitted to be posted to his account.
3. Purchase from Shyam ₹ 15,000 has been posted to the debit side of his account.
4. Purchase from Ghanshyam ₹ 10,000 has been posted to his account as ₹ 1,000.
5. Purchase from Sita Ram ₹ 5,000 has been posted to his account as ₹ 50,000.

Enter the following transactions in the Journal of Sahil Bros.:

2018		₹
October 1	Purchased goods from Anil for Cash	40,000
October 3	Purchased goods from Atul	75,000
October 6	Returned goods to Atul	3,000
October 8	Paid cash to Atul	50,000
October 10	Sold goods to Charu	1,00,000
October 12	Charu returned 20% of goods
October 15	Paid rent	2,000
October 20	Sahil withdrew for personal use	10,000

Write the following transactions in a Two Column Cash Book and balance the Cash Book:

2017		(₹)
Jan. 1	Cash in hand	6,000
	Bank Balance (Cr)	3,000
Jan. 3	Deposited into Bank	2,000
Jan. 5	Received from Mohan	400
	Discount allowed	10
Jan. 7	Received a cheque from Hari and sent it to bank	600
Jan. 9	Received a cheque from Prem Mohan	1,600
	Discount allowed	25
Jan. 12	Withdrew from bank for office use	300
Jan. 13	Bought goods for cash	600
Jan. 14	Sold goods for cash	1,200
Jan. 16	Paid to Ganesh by cheque	494
	Discount received	6
Jan. 18	Prem Mohan's cheque deposited in the bank
Jan. 20	Sold goods to Gopal for ₹ 1,500 for which he gave cash ₹ 800 and a cheque of ₹ 700
Jan. 22	Deposited into bank (including Gopal's cheque)	900
Jan. 24	Paid rent by cheque	150
Jan. 25	Withdrew from bank for personal use	200
Jan. 28	Bank notifies that Prem Mohan's cheque was dishonoured
Jan. 30	Received from Anil ₹ 270 in cash and ₹ 540 by cheque
	Discount Allowed ₹ 90
	The cheque was deposited into bank.
Jan. 31	Bank charges as shown in Pass Book	5
	Paid Salary	500

Classify the under-mentioned errors into:

1. Error of Omission
2. Error of Commission
3. Compensating Error
4. Error of Principle

1. Purchased goods from Bhardwaj on credit for ₹ 600, but were recorded in the purchase book as ₹ 6,000.
2. Amount paid for the proprietor’s life insurance premium was debited to 'General Expenses Account'.
3. Goods amounting to ₹ 2,000 have been returned to Chakravarti, but no entry has been made in the books.
4. An excess debit of ₹ 4,500 has been made in the account of X, whereas Y's account has been credited by ₹ 5,000 instead of ₹ 500.
5. Goods sold to Suresh for ₹ 650 were recorded as ₹ 560 in the Sales Book.
6. Typewriter purchased for office use has been debited to Purchases Account.
7. Wages paid for the construction of Building ₹ 15,000 were recorded in "Wages Account'.
8. Goods for ₹ 500 have been taken by the proprietor for his personal use, for which no entry has been passed in the books.

Enter the following transactions in the Journal of Suresh, Delhi who trades in ready-made garments:

2019		₹
April 1	Suresh paid into bank as Capital*	60,000
April 2	He bought goods and paid by cheque	24,000
April 3	Sold goods to Mukand & Co., Delhi	6,700
April 4	Sold goods for cash	10,900
April 5	Paid sundry expenses in cash*	3,000
April 8	Paid for office furniture and fittings by cheque	4,000
April 9	Bought goods from Ramesh & Bros., Faridabad (Haryana)	10,600
April 11	Returned goods to Ramesh & Bros.	1,500
April 12	Issued cheque to Ramesh & Bros. in full settlement*	9,500
April 30	Bank charged interest*	200
April 30	Borrowed from Ridhi @ 10% per annum interest*	50,000
April 30	Received from Mahendra on account*	6,000
April 30	Sold household furniture and paid the amount into business*	2,000
April 30	Sold goods costing ₹ 5,000 to Anita for cash at a profit of 20% on cost, less 20% trade discount
April 30	Sold goods costing ₹ 20,000 to Sunil at a profit of 20% on sale less 20% Trade Discount and paid cartage ₹ 150 (to be charged from customer).

CGST and SGST is levied @ 6% each on intra-state sale and purchase. IGST is levied @ 12% on inter-state sale and purchase. Out of the above, transactions marked with (*) are not subject to levy of GST.
[Hint: Household furniture is personal asset. When it is sold GST will not be levid. Since amount realised is invested in the firm, Suresh's Capital Account will be credited.}

Rectify the following errors:

1. Depreciation provided on machinery ₹ 4,000 was not posted.
2. Bad debts written off ₹ 5,000 were not posted.
3. Discount allowed to a debtor ₹ 100 on receiving cash from him was not posted.
4. Discount allowed to a debtor ₹ 100 on receiving cash from him was not posted to discount account.
5. Bill receivable for ₹ 2,000 received from a debtor was not posted.