Page 226 - ISCDEBK-XI

21.14 Double Entry Book Keeping—ISC XI
(vi) (a) Sita Ram ...Dr. 750
To Lala Ram 750
(Being cheques received from Lala Ram wrongly credited to
Sita Ram instead of to Lal a Ram, now corrected)
(b) Bank A/c ...Dr. 750
To Cash A/c 750
(Being cheque received from Lala Ram wrongly debited to
Cash Account instead of to Bank Account, now rectified)
(vii) Drawings A/c ...Dr. 1,000
To Travelling Expenses A/c 1,000
(Being amount drawn by the proprietor wrongly debited to
Travelling Expenses Account, now corrected)

(ii) Effect of Errors on the Disagreement of the Trial Balance
All the errors given in the problem do not affect the agreement of the Trial Balance because
these errors are errors of complete omission in a subsidiary book or errors of posting to the
correct side but in the wrong account or errors of principle or compensating errors. These errors
do not affect the agreement of the Trial Balance because figures of debit and credit remain the
same by such errors.
Illustration 11.
An accountant prepared a Trial Balance which revealed a difference in the books of account.
He put the difference in a newly opened Suspense Account. Subsequently, he detected the
following errors:
(a) A dishonoured bill receivable for ` 15,000 returned by the bank had been credited to the
Bank Account and debited to Bills Receivable Account.
(b) Sundry items of plant sold for ` 10,000 had been entered in the Sales Book, the total of
which had been posted to the Sales Account.
(c) ` 100 discount received from a creditor had been duly entered in his account but not posted
to Discount Received Account.
(d) Goods worth ` 2,000 returned by Gaurav were recorded in the Sales Book and were posted
accordingly.
(e) Goods purchased from a merchant for ` 5,450 had been posted to the credit of his account
as ` 4,540.
(f) An item of ` 100 entered in the Sales Return Book had been posted to the debit of the
customer who returned the goods.
(g) An entry of ` 1,450 representing the selling price of goods returned to Shiv had been made
in Returns Outwards Book and posted. The amount should have been ` 1,300, the invoice
value of the goods in question.
(h) Goods worth ` 1,500 taken by the proprietor had been omitted to be recorded in the books.
(i) Amount of ` 4,200 received from Mr. Rahim which was written off as bad debt last year
has been credited to his account.
(j) On scrutinising the accounts of a defaulting cashier it was discovered that he had received
` 20,000 from customers and ` 10,000 from cash sales and had paid ` 4,800 to a creditor
(after deducting ` 200 for discount), but none of these transactions were recorded in the
books of account.