Page 138 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes (iv) An amount of 2,000 received from Ram has been wrongly posted to the credit of Ravi as
200.
(v) Discount column of the receipt side of the cash book was wrongly added as 40 instead of
140.
Solution:
Journal Entries to rectify the errors

Dr. Cr.
S. No. Particulars L.F. Amount Amount
( ) ( )
(i) Proprietor’s A/c Dr. 700
To Sundry Income A/c 700
(Proprietor’s A/c was wrongly credited hence rectified.)
(ii) Purchases A/c Dr. 136
To Supplier’s A/c 100
To Suspense A/c 36
(Purchases A/c & Supplier’s A/c were wrongly debited & credited
hence rectified.)
(iii) Suspense A/c Dr. 100
To Sales A/c 100
(Sales A/c was under cast hence credited by 100.)
(iv) Ravi Dr. 200
Suspense A/c Dr. 1,800
To Ram 2000
(Ravi’s A/c wrongly credited in place of Ram, hence rectified.)
(v) Suspense A/c Dr. 100
To Discount A/c 100
(Discount column on the receipt side of the cash book wrongly
totalled, hence rectified.)

Illustration 9: The following errors were detected in the accounts of M/s Rajesh & Sons for the
year ended on 30th June, 2006.
(i) A bill for 2000 for the erection of a small cycle shed was debited to repairs A/c.

(ii) A cheque for 200 received from Ram & Co. was dishonoured and debited to discount
account.
(iii) A sum of 500 drawn by the proprietor for his personal expenses was debited to travelling
expenses account.
(iv) Goods to the value of 100 returned by Ram were put into stock but no entry was made in
the books.
(v) A cheque of 100 received from Kartar Chand was credited to the account of Tota Ram and
debited to cash instead of the bank account.

(vi) Wages paid to the firm's own workman for certain additions to the new machinery
amounted to 500 were posted to wages account.
Give journal entries to correct these errors.

132 LOVELY PROFESSIONAL UNIVERSITY