Page 235 - ISCDEBK-XI

Rectification of Errors 21.23
Illustration 16.
Sumant has matched his Trial Balance by placing the difference in Suspense Account and has
prepared a Trading and Profit & Loss Account and the Balance Sheet. On subsequent scrutiny,
errors as detailed below were identified. Rectify these errors and ascertain the amount carried
to Suspense Account:
(i) A sale of goods to Kamal for ` 3,500 has been credited to his account.
(ii) Goods purchased from Dharam amounting to ` 7,500 were entered in the Purchases Day
Book but were omitted from Dharam’s Account in the Ledger.
(iii) A computer printer purchased for ` 5,000 was debited to Purchases Account.
(iv) Goods returned to S. Sen of ` 750 were debited to P. Sen’s Account.
(v) Repair to office car of ` 7,500 were debited to the Office Car Account.
(vi) Goods sold to R. Banerjee valued at ` 7,300 have been posted into his account as ` 3,700.
Will the above rectification affect the profit figure? if so, to what extent.
Solution: In the Books of Sumant
RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Kamal (` 3,500 × 2) ...Dr. 7,000
To Suspense A/c 7,000
(Being sale of goods to Kamal for ` 3,500 wrongly credited to his account,
now rectified )
(ii) Suspense A/c ...Dr. 7,500
To Dharam 7,500
(Being goods purchased from Dharam not credited to his account,
now rectified)
(iii) Printer A/c ...Dr. 5,000
To Profit & Loss Adjustment A/c 5,000
(Being purchase of printer passed through Purchases Account,
now rectified)
(iv) S. Sen ...Dr. 750
To P. Sen 750
(Being goods returned to S. Sen wrongly debited to P. Sen Account,
now rectified)
(v) Profit & Loss Adjustment A/c ...Dr. 7,500
To Office Car A/c 7,500
(Being repair to car debited to Office Car Account, now rectified)
(vi) R. Banerjee ...Dr. 3,600
To Suspense A/c 3,600
(Being goods sold to R. Banerjee for ` 7,300 wrongly posted to his
account as ` 3,700, now rectified)
Capital A/c ...Dr. 2,500
To Profit & Loss Adjusment A/c 2,500
(Being net loss transferred to Capital Account)
Dr. SUSPENSE ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d (Balancing Figure) 3,100 By Kamal 7,000
To Dharam 7,500 By R. Banerjee 3,600
10,600 10,600