Page 231 - ISCDEBK-XI

Rectification of Errors 21.19
How would you rectify the errors assuming that:
(i) They were detected after preparing Trial Balance, but before preparing final accounts (the
difference being taken to Suspense Account)?
(ii) They were detected after preparing final accounts?
(Narrations to Journal Entries not required)
Solution:
(i) When errors are rectified after preparing the Trial Balance but before preparing Final Accounts:

RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr. (`) Cr. (`)
(a) Suspense A/c ...Dr. 1,800
To Triman Chemicals 1,800
(b) Stationery A/c ...Dr. 1,500
To Suspense A/c 1,500

(c) Furniture A/c ...Dr. 2,600
To Office Expenses A/c 2,600
(d) Trivedi & Co. ...Dr. 8,000
To Suspense A/c 8,000
(e) Purchases A/c ...Dr. 4,200
Sales A/c ...Dr. 2,400
To Mantri & Co. 6,600

(ii) When errors are rectified after preparing Final Accounts:
RECTIFYING JOURNAL ENTRIES

Date Particulars L.F. Dr. (`) Cr. (`)
(a) Suspense A/c ...Dr. 1,800
To Triman Chemicals 1,800
(b) Profit & Loss Adjustment A/c ...Dr. 1,500
To Suspense A/c 1,500
(c) Furniture A/c ...Dr. 2,600
To Profit & Loss Adjustment A/c 2,600
(d) Trivedi & Co. ...Dr. 8,000
To Suspense A/c 8,000
(e) Profit & Loss Adjustment A/c ...Dr. 6,600
To Mantri & Co. 6,600
Capital A/c ...Dr. 5,500
To Profit & Loss Adjustment A/c 5,500
Note: Profit & Loss Adjustment Account has been given debit or credit in place of nominal accounts
because errors have been discovered after the preparation of final accounts. The last entry relates to
balance of Profit & Loss Adjustment Account transferred to Capital Account being loss due to rectification
of all errors.