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Rectification of Errors                                                        17.5

                         (iv)  A cheque for ` 7,500 received from S. Desai was credited to the account of R Ram.

                          (v)  Goods to the value of ` 700 returned by X were included in the Closing Stock
                             but no entry was made in the books.
                         (vi)  Goods costing ` 2,000 were purchased for various members of the staff and
                             the cost was included in “Purchases”. A similar amount was deducted from
                             the salaries of the staff members concerned and the net payments to them
                             debited to Salaries Account.
                        (vii)  Goods sold to Mohan for ` 475 have been wrongly entered in the Sales Book
                             as ` 745.


                     Solution:                            JOURNAL
                     Date     Particulars                                          L.F.   Dr. (`)   Cr. (`)

                        (i)   Building A/c                                   ...Dr.       20,000
                                To  Repairs A/c                                                    20,000
                             (Erection charges wrongly shown as revenue expenditure,
                             now rectified by capitalising the same)

                        (ii)   Repairs A/c                                   ...Dr.       5,000
                                To  Plant and Machinery A/c                                         5,000
                             (Repairs wrongly capitalised instead of being treated as revenue
                             expenditure, now rectified)
                       (iii)   Plant and Machinery A/c                       ...Dr.       7,000
                                To  Wages A/c                                                       7,000
                             (Wages for additions to Machinery wrongly treated as
                             Revenue expenditure, now rectified by capitalising the same)
                       (iv)   R. Ram                                         ...Dr.       7,500
                                To  S. Desai                                                        7,500
                             (Wrong posting of cheque received rectified)
                        (v)   Returns Inward A/c                             ...Dr.         700
                               To  X                                                                 700
                             (Returns inward not recorded by mistake, now rectified)
                       (vi)   Salaries A/c                                   ...Dr.       2,000
                                To  Purchases A/c                                                   2,000
                             (Goods purchased for staff members wrongly recorded
                             as purchases, now rectified)

                       (vii)   Sales A/c                                     ...Dr.         270
                                To  Mohan                                                            270
                             (Excess recording of sales in Sales Day Book rectified)
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