Page 188 - DCOM101_FINANCIAL_ACCOUNTING_I

Financial Accounting-I

Notes Similarly, if Building is purchased for ` 2 lacs is recorded in the Purchases Book, again the error
affects both the accounts i.e. (1) Building a/c (2) Purchases a/c.
Though the error is of principle, in the above case Purchases a/c is unnecessarily debited and
Building a/c is wrongly left out. In order to rectify the error the following entry (correcting the
error) is to be passed:

Journal Entry for Correction (Rectifi cation)
S.No. Particulars L.F. ` `
1. Building a/c Dr. 2,00,000
To Purchases a/c 2,00,000
Error in Building a/c and Purchases a/c rectifi ed
Journal Entry already passed which was a wrong entry
S.No. Particulars L.F. ` `
1. Purchase a/c Dr. 2,00,000
To Cash/Creditor a/c 2,00,000
Buildings purchased

Correct entry required to pass
S.No. Particulars L.F. ` `
1. Building a/c Dr. 2,00,000
To Cash/Creditor a/c 2,00,000
Buildings purchased
Thus, we see that if the error affects both the accounts, then it can be rectified by passing a journal

entry as explained above.
Illustration 1: Rectify the following errors:
1. A sale of goods to Raja Ram for ` 2500 was passed through the Purchases Book.

2. Salary ` 800 paid to Hari Babu was wrongly debited to his Personal Account.
3. Furniture purchased on credit from Mohan Singh for ` 1000 was entered in the Purchases
Book.
4. ` 5000 spent on the extension of building was debited to the buildings repairs account.

5. Goods returned by Mani Ram ` 1200 were entered in Returns Outward Book.
Solution:

Journal Entries to rectify the errors
Dr. Cr.
S. No. Particulars L.F. (`) (`)
1. Raja Ram Dr. 5,000
To Purchases a/c 2500
To Sales a/c 2500
A sale of goods to Raja Ram through the Purchases book is
rectifi ed
2. Salary a/c Dr. 800
To Hari Babu 800
Salary wrongly debited in his personal a/c is rectifi ed.
Contd....

182 LOVELY PROFESSIONAL UNIVERSITY