- Before preparation of the Trial Balance, the following errors were found in the books of Hare Rama & Sons. Give the necessary entries to correct them.
(i) Minor Repairs made to the building amounting to Rs.1,850 were debited to the Building Account.
(ii) An amount of Rs.3,000 due from Shayam Lal, which had been written off as bad debts in the previous year, recovered in the current year, and had been posted to the Personal Account of Shayam Lal.
(iii) Furniture purchased for office use amounting to Rs.20,000 has been entered in the purchase day book.
(iv) Goods purchased from Ram Singh amounting to Rs.8,000 have remained unrecorded so far.
(v) College fees of proprietor’s son, Rs.15,000 debited to the Audit fees Account.
(vi) Receipt of Rs.4,500 from Meet Kumar credited to the Pinki Rani.
(vii) Goods amounting to Rs.6,200 had been returned by a customer and were taken in to inventory, but no entry was made m the books.
(viii) Rs.1500 paid for wages to workmen for making office furniture had been charged to wages account.
(ix) Salary paid to a clerk Rs.12,000 has been debited to his personal Account.
(x) A purchase of goods from Raghav amounting to Rs. 20,000 has been wrongly entered through the sales book.[2022 December – 10 Marks ]
- Pass the Journal entries to rectify the following errors detected during preparation of the Trial Balance :
(i) Wages paid for construction of office building debited to wages account Rs. 20,000.
(ii) A credit sale of goods Rs. 1,200 to Ramesh has been wrongly passed through the Purchase Book.
(iii) An amount of Rs. 2,000 due from Mahesh Chand which had been written off as a bad debt in the previous year was unexpectedly recovered and has been posted to the personal account of Mahesh Chand.
(iv) Goods (Cost being Rs. 5,000 and Sales price being Rs.6,000) distributed as free samples among prospective customers were not recorded anywhere.
(v) Goods worth Rs. 1,500 returned by Green have not been recorded, anywhere.[2021 December – 5 Marks ]
- Mr. Ratan was unable to agree the Trial Balance last year and wrote off the difference to the Profit and Loss Account of that year. Next year, he appointed a Chartered Accountant who examined the old books and found the following mistakes:
(i) Purchase of a scooter was debited to conveyance account Rs. 30,000. Mr. Ratan charges 10% depreciation on scooter
(ii) Purchase account was over cast by Rs.1,0o,ooo.
(iii) A credit purchase of goods from Mr. X for Rs. 20,000 was entered as sale.
(iv) Receipt of cash from Mr. Anand was posted to the account of Mr. Bhaskar Rs. 10,000.
(v) Receipt of cash from Mr. Chandu was posted to the debit of his account, Rs. 5,000.
(vi) Rs. 5,000 due by Mr. Ramesh was omitted to be taken to the Trial Balance.
(vii) Sale of goods to Mr. Ram for Rs. 20,000 was omitted to be recorded.
(viii) Amount of Rs. 23,950 of purchase was wrongly posted as Rs..25,930.
Suggest the necessary rectification entries.[2021 July- 10 Marks ]
- Mr. Joshi’s trial balance as on 31st March, 2020 did not agree. The difference was put to a Suspense Account. During the next trading period, the following errors were discovered :
(i) The total of the Purchases Book of one page, Rs.5,615 was carried forward to the next page as 6551.
(ii) A sale of Rs.281 was entered in the Sales Book as Rs.821 and posted to the credit of the customer.
(iii) A return to creditor, Rs.295 was entered in the Returns Inward Book; however, the creditor’s account was correctly posted.
(iv) Cash received from Senu, Rs 895 was posted to debit of Sethu.
(v) Goods worth Rs.1,400 were dispatched to a customer before the close of the year but no invoice was made out.
(vi) Goods worth Rs.1,600 were sent on sale or return basis to a customer and entered in the Sales Book at the close of the year, the customer still had the option to return the goods. The gross profit margin was 20% on Sale.
(vii) Rs.600 due from Mr. Q was omitted to be taken to the trial balance.
(viii) Sale of goods to Mr. R for Rs.3,000 was omitted to be recorded. You are required to give journal entries to rectify the errors in a way so as to show the current year’s profit or loss correctly.[2021 January- 10 Marks ]
- M/s. Applied Laboratories were unable to agree the Trial Balance as on 31st March, 2020 and have raised a suspense account for the difference. Next year the following errors were discovered:
(i) Repairs made during the year were wrongly debited to the building A/c – Rs.12,500.
(ii) The addition of the ‘Freight’ column in the purchase journal was short by Rs.1,500.
(iii) Goods to the value of Rs. 1,050 returned by a customer, Rani & Co., had been posted to the debit of Rani & Co. and also to sales returns.
(iv) Sundry items of furniture sold for Rs.30,000 had been entered in the sales book, the total of which had been posted to sales account.
(v) A bill of exchange (received from Raja & Co.) for Rs.20, 000 had been returned by the bank as dishonoured and had been credited to the bank and debited to bills receivable account. You are required to pass journal entries to rectify the above mistakes.[2020 November – 10 Marks ]
- Correct the following errors (i) without opening a- Suspense Account and (ii) with opening a Suspense .Account:
(1) The sales book has been totalled Rs.2,100 short.
(2) Goods worth Rs. 1,800 returned by Gaurav & Co. have not been recorded anywhere.
(3) Goods purchased Rs. 2,250 have been posted to the debit of the supplier Sen Brothers.
(4) Furniture purchased from Mary Associates, Rs. 15,000 has been entered in the purchase Daybook.
(5) Discount received from Black and White Rs. 1,200 has not been. entered in the books.
(6) Discount allowed to Radhe Mohan & Co. Rs. 180 has not been entered in the Discount Column of the Cashbook. The account of Radhe Mohan & Co. has, however, been correctly posted.[2019 November – 10 Marks ]
- Give journal entries (with narrations) to rectify the following errors located in the books of a Trader after preparing the Trial Balance :
(i) An amount of Rs. 4,500 received on account of Interest was credited to Commission account.
(ii) A sale of Rs.2, 760 was posted from Sales Book to the Debit of M/s Sobhag Traders at Rs. 2,670
(iii) Rs. 35,000 paid for purchase of Airconditioner for the personal use of proprietor debited to Machinery a/c.
(iv) Goods returned by customer for Rs. 5,000. The same have been taken into stock but no entry passed in the books of accounts.[2019 May – 4 Marks ]
- The following mistakes were located in the books of a concern after its books were closed and a Suspense Account was opened in order to get the Trial Balance agreed:
(i) Sales Day Book was overcast by Rs. 1,000.
(ii) A sale of Rs.5,000 to X was wrongly debited to the Account of Y.
(iii) General expenses Rs. 180 was posted in the General Ledger as Rs. 810.
(iv) A Bill Receivable for Rs.1,550 was passed through Bills Payable Book. The Bill was given by P.
(v) Legal Expenses Rs. 1,190 paid to Mrs. Neetu was debited to her personal account.
(vi) Cash received from Ram was debited to Shyam Rs.1,500.
(vii) While carrying forward the total of one page of the Purchases Book to the next, the amount of Rs.1,235 was written as Rs. 1,325.
Find out the nature and amount of the suspense Account and pass entries (including narration) for the rectification of the above errors in the subsequent year’s books.[2018 November – 10 Marks ]
- Give journal entries (narrations not required) to rectify the following:
(i) Purchase of Furniture on credit from Nigam for Rs.3,000 posted to Subham account as Rs.300.
(ii) A Sales Return of Rs.5,000 to Jyothy was not entered in the financial accounts though it was duly taken in the stock book.
(iii) Investments were sold for Rs.75,000 at a profit of Rs.15,000 and passed through Sales account.
(iv) An amount of Rs.10,000 withdrawn by the proprietor (Darshan) for his personal use has been debited to Trade Expenses account.[2018 May – 4 Marks ]