Page 91 - ISCDEBK-XI

13.8 Double Entry Book Keeping—ISC XI

Notes:

1. Purchase of fixed assets should be debited to Fixed Assets Account and not to Purchases Account.
So, balance of fixed assets should be increased and balance of Purchases Account should be decreased
by ` 64,000.
2. Sales invoice of ` 30,000 should be posted to customer’s personal account. So, trade debtors will increase
by ` 30,000.
3. Credit note issued to a customer for ` 6,000 regarding sales return (or returns inward) will decrease balance
of debtors and increase returns inward by the same amount.

4. A credit balance of ` 3,200 in the purchases ledger should be added in trade creditors.
5. Sales should be increased by ` 20,000 because Sales Book was undercast.

Illustration 4.
Total of the debit side of the Trial Balance of a machinery repairing company as on 31st March,
2022 is ` 1,66,590 and that of the credit side is ` 42,470. After checking following mistakes are
discovered:
Heads of Accounts Correct Balance Balance as it appears in
(as it should be) (`) the Trial Balance (`)

Opening Stock 14,900 14,800
Repairs 61,780 61,780
(But appears on the debit side)
Rent 2,160 2,400
Sundry Creditors 6,070 5,900
Sundry Debtors 8,060 8,310

What will be the correct total of the Trial Balance?

Solution:

ASCERTAINMENT OF CORRECT TOTAL OF TRIAL BALANCE
as on 31st March, 2022
Particulars Dr. (`) Cr. (`)
Total as per Trial Balance 1,66,590 42,470
Opening Stock Undercast (` 14,900 – ` 14,800) (+) 100 ...
Repair being Credit Balance (income) but shown as debit balance (–) 61,780 (+) 61,780
Rent overstated (` 2,400 – ` 2,160) (–) 240 ...
Sundry Creditors undercast (` 6,070 – ` 5,900) ... (+) 170
Sundry Debtors overstated (` 8,310 – ` 8,060) (–) 250 ...
Correct Total of the Trial Balance 1,04,420 1,04,420