Give Answer As Asked .(4 Marks)

Question 14 Marks

Trial balance of Pallavi as on $31-3-2015$ does not tally. The difference is transferred to suspense account in order to get it tallied which is as under :
Trial Balance of Pallavi as on $31-3-2015$

(1) $₹ 1300$ received from Anita is posted on the debit side of her account.
(2) Total of sales book is overcast by $₹ 600 .$
(3) Salary paid to Jalpa is debited to her personal ₹.
(4) Opening balance of $₹ 1600$ of Meena, a debtor's A/c, is omitted to be carried down. Give necessary rectification entries to rectify the above errors. Prepare suspense account and the rectified trial balance.

Answer

Journal Proper of Pallavi

Suspense Account

Rectified Trial Balance of Pallavi as on 31-3-2015

Note :
(1) Amount of accounts having astrik mark is changed after rectification of error.
(2) New account of Meena is added.
(3) Debit balance of Anita's is now converted into a credit balance.
(4) After rectification of all errors, when the effect is given in suspense account it is closed and therefore in new rectified trial balance its balance is not shown.

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Question 24 Marks

Prepare rectification to rectify the following errors detected while preparing final accounts of Shri ram as on $31-3-2015$
(1) Goods of $Rs.5,000$ sold to Nayana is recorded in purchase book by mistake.
(2) Our bill receivable of $Rs.1,900$ accepted by Rekha is recorded in bills receivable book by $Rs.1,000.$
(3) $Rs.150$ credited by bank as interest in pass book recorded on payment side of cash book
(4) Goods of $Rs.1,200$ sold to Amita is recorded in purchase book by $Rs.200$

Answer

$Rs.19,400$

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Question 34 Marks

Pass necessary rectification entries in the books of Shyam to rectify the following errors $1. R1.500$ withdrawn from bank for personal use is left to be recorded $2.$ Machine of $Rs 5.600$ is purchased from Naresh is recorded in Purchase book $3. R5500$ paid to Kajal is debited to Raj's account by mistake $4$. Goods of Rs $7$rors $00$ sold to Switoo is recorded in purchase book by mistake

Answer

Date	Particulars	L.F	Debit	Credit
1	Drawings A/C Dr To Bank A/c (Being the rectification of unrecorded withdrawals from bank for personal use.)		$1,500$	$1,500$
2	Machine A/C Dr To Purchase A/C (Being the rectification entry for purchase of machine wrongly debited to purchase A/c.)		$5,600$	$5,600$
3	Kajal's A/C Dr To Raj's A/C (Being 500 paid to Kajal debited to Raj's account by mistake, now rectified.)		$500$	$500$
4	Switoo's A/C Dr To Sales A/C To Purchase A/C (Being goods sold to Switoo’s of 700 recorded by mistake in purchase book, now rectified.)		$1,400$	$700$ $700$

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Question 44 Marks

Pass necessary rectification entries to rectify the following journal entries written by Ishwarlal:

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Question 54 Marks

What is compensatory errors? How to rectify these errors? Explain with Illustration.

Answer

Date	Particular	L.F	Debit	Credit
	Dhaval’s A/C Dr To Ishita A/C (Being rectification entry for Dhaval’s account debited less by $3,600$/- and Ishita account not credited with $3,600$/-.)		$3,600$	$3,600$

Meaning: In the books of accounts when more than one error exists but because of their nullifying effects on both debit and credit sides, the trial balance tallies, such errors are known as compensatory erro$Rs.$

In this type of error, the effect of error (or errors) on one side is removed by the effect of error (or errors) on another side. Means, the error on the amount on debit side, with the same amount if an error is there on the credit side, then the effect of error in totalling will be removed and trial balance will get tally.

How to rectify these errros?

e.g., Goods of $Rs.4,000$ sold to Dhaval which is debited to his account as $Rs. 400$, while received $Rs.3,600$ from Ishita, which is not posted to her account. Here Dhaval’s account is debited less by $Rs.3,600$ which is compensated with the error of $Rs. 3,600$ received from Ishita and not credited to her account, and therefore the trial balance will get tally. And so rectification entry is passed as follow:

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Question 64 Marks

What is errors of principle? How to rectify these errors? Explain with illustration.

Answer

Meaning: Error of principle means, while writing the books of accounts, the basic principles of accounts are violated.These types of errors do not affect the trial balance. Because the amount of the transaction Is same but instead of one account any other account Is debited or credited.
How to rectify these errors?
In such types of errors, capital expenditure Is treated as revenue expenditure or capital income is treated as revenue income and recorded in the books accordingly.
e.g., Old machine of $Rs. 6,000$ sold to Sunder Patel which is recorded In the sales book. Here machine is an asset of the business, so It should not be credited to sales account (should be credited to machine account) which Is recorded in the wrong account and therefore principle is violated. Though this type of the error is there. trial balance will get tally, because the debited and credited amount are same. So rectification entry is passed as follows:

Date	Particular	L.F	Debit	Credit
	Sales A/C Dr To Machine A/C (Being rectification entry for sale of old machine wrongly credited sales A/C)		$6,000$	$6,000$

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Question 74 Marks

What is errors of omission? How to rectify these errors? Explain with illustration.

Answer

Meaning : When a transaction Is totally omitted to be recorded in the journal or the subsidiary books or the ledger, such an error is known as an error of omission.

The trial balance will tally even though error of omission is committed because posting is omitted on both credit and debit side.

How to rectify these errors?

Errors of omission take place at two stages:

$(1)$ A transaction is totally omitted to be recorded in the journal or the subsidiary books or the ledger.

e.g., Goods sold to Rajan for $Rs.12,000$ is not recorded in the books. This transaction Is not recorded in journal or in subsidiary book. As a result, the Rajan’s account is not debited by $Rs.12,000$ and sales account is not credited by $Rs. 12,000$. Thus, on debit side and on credit side error is there with an equal amount and therefore trial balance will tally. For this, rectification entry is passed as follows:

Date	Particular	L.F	Debit	Credit
	Rajan’s A/C Dr To sales A/C (Being the ratification entry for unrecorded sales .)		$12,000$	$12,000$

$(2)$ A transaction Is totally recorded in the journal or the subsidiary books or the ledger but posting of both accounts are omitted.

e.g., Washing machine purchased on credit from Sales India of $Rs.35,000$ Is recorded in journal proper, but it is forgotten to be posted In the accounts of Washing machine and Sales India In ledger.

To rectify this error there is no need to record journal entry in journal proper but the error will be rectified by debiting Washing machine A/c and crediting Sales India A/c in ledger.

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Question 84 Marks

Prepare rectification entries to rectify the following errors detected while preparing final accounts of Shri Balram as on $31 -03- ‘15: (5)$ Our bill receivable of $Rs.1,900$ accepted by Rekha is recorded in bills receivable book by $Rs. 1,000. (6) Rs.150$ credited by bank as interest in passbook recorded on payment side of cashbook. $(7)$ Goods of Rs. $1,200$ sold to Amita is recorded in purchase book by $Rs. 200.$

Answer

$Rs. 12,600$

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Question 94 Marks

Pass necessary rectification entries to rectify the following journal entries written by popatlal:
Date	Particulars		L.F.	Debit(Rs.)	Credit (Rs.)
$1$	Income tax A/c.	Dr.		$5,000$
	To Bank A/c.				$5,000$
	(Being the amount $Rs.5,000$ of income tax paid by cheque)
$2$	Cash A/c.	Dr.		$1,200$
	To Bank A/c.				$1,200$
	(Being change of $Rs.1,200$ taken from bank)
$3$	Pushpa's A/c.	Dr.		$1,800$
	To Purchase return A/c.				$1,800$
	(Being the goods of $Rs. 1,800$ returned by Pushpa recorded in purchase return book)
$4$	Furniture A/c.	Dr.		$20,000$
	To Cash A/c.				$18,000$
	To Discount A/c.				$2,000$
	(Being the amount $Rs. 20,000$ paid after deducting 10% discount for the purchase of furniture for personal use)
	Total			$28,000$	$28,000$

Answer

Journal proper of popatlal
Date	Particulars		L.F.	Debit(Rs.)	Credit (Rs.)
$1$	Drawings A/c	Dr.		$5,000$
	To Income tax A/c				$5,000$
	(Being the rectification of Income tax (personal expense) paid, wrongly recorded)
$2$	Bank A/c	Dr.		$1,200$
	To Cash A/c				$1,200$
	(Being the rectification of change taken from bank is wrongly debited to cash A/c)
$3$	Sales return A/c	Dr.		$18,000$
	Purchase return A/c	Dr.		$1,800$
	To Pushpa's A/c				$19,800$
	(Being the rectification of goods of $Rs.18,000$ returned by Pushpa recorded in purchase return book by $Rs.1,800)$
$4$	Drawings A/c	Dr.		$18,000$
	Discount A/c	Dr.		$2,000$
	To Furniture A/c				$20,000$
	(Being rectification of the furniture purchased for personal use. Wrongly debited to furniture A/c)
	Total			$46,000$	$46,000$

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