Page 214 - ISCDEBK-XI

21.2 Double Entry Book Keeping—ISC XI
(v) Recording wrong amount in the books of the original entry.
(vi) Recording both aspects of a transaction twice in the books of account.
• Types of Errors
(i) Errors of Principle. It means transactions are recorded in contravention of accounting principles.
(ii) Error of Omission. If a transaction is omitted from being recorded completely or partially, it is known
as an error of omission.
(iii) Error of Commission. Transaction wrongly written in the Subsidiary Book or in the Ledger or wrong
posting or wrong balancing is known as error of commission.
(iv) Compensating Error. When an error is committed and it is nullified by another error, it is known as
a compensating error.
• Errors may be such as affect only one account—one-sided errors or they affect both the accounts—
two-sided errors.
• Suspense Account. In order to avoid the delay in the preparation of Final Accounts, the difference in the
Trial Balance is put to Suspense Account (which is an account of a temporary nature). When errors are
located, entries are passed with the help of Suspense Account and when all errors affecting the Trial Balance
are located, the Suspense Account stands closed.

Solved Questions

Illustration 1.
Rectify the following errors found in the books of Mr. Dutt. The Trial Balance as on 31st March,
2022 showed excess credit of ` 493. The difference was posted to the Suspense Account.
(i) An amount of ` 100 was received from D. Das on 31st March, 2022, but had been entered
in the Cash Book on 4th April, 2022.
(ii) The total of Returns Inward Book for March had been cast short by ` 100.
(iii) The purchase of a table for office use costing ` 300 had been passed through the Purchases
Book.
(iv) ` 375 paid for wages to workmen for making showcases had been charged to the Wages
Account.
(v) A purchase of ` 67 had been posted to the Creditor’s Account as ` 60.
(vi) A cheque for ` 200 received from P.C. Joshi had been dishonoured and was debited to
the Allowances Account.
(vii) ` 1,000 paid for the purchase of a motor cycle for Mr. Dutt had been charged to the
Miscellaneous Expenses Account.
(viii) Goods amounting to ` 100 had been returned by a customer and were taken into stock,
but no entry in respect thereof was made in the books.
(ix) A sale of ` 200 to Singhi & Co., was wrongly credited to their account.
Solution:
The following entries should be passed on 31st March, 2022:
RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank ...Dr. 100
To D. Das (Note) 100
(Being the amount received)
(ii) Returns Inward A/c ...Dr. 100
To Suspense A/c 100
(Being the mistake in totalling the Returns Inward Book corrected)