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One sided error

In prior unit we learnt that, if Trial Balance does not agree, the difference of trial balance is transferred to a Suspense account to tally the Trial Balance artificially. It is most common to detect one sided errors at this stage. These types of errors are rectified through the “Suspense account”. If all the one sided errors are located and rectified before completing the final accounts, Suspense account will show nil balance and will be closed. Whenever any error is rectified, some part of Suspense account is reduced or may be increased. If the rectification needs debiting or crediting an account of the opposite aspect, either a credit or debit goes to Suspense account.
 

Note: If two sided errors are rectified at this stage, it does not affect the suspense account. The reason is that, such an error did not cause the disagreement of the Trial Balance and hence did not contribute to the suspense account figure.

 

Example: The Purchases book was under cast by ₹ 36

 

Date

Particulars

L.F.

Debit ()

Credit ()

 

Purchases A/c Dr.

 

36

 

To Suspense A/c

 

 

36

[Being the mistake in totalling, now rectified]

 

 

 


Illustration 3 [Rectification of one-sided errors of posting]

 

A book keeper, while preparing Trial Balance, finds that the debit total exceeds by ₹ 250. He places the difference to a Suspense account. Pass the necessary journal entries to rectify the following errors discovered by the auditor and prepare Suspense account.

  1. A cheque from Wilson for ₹ 75 had been posted to the credit of Wilson as ₹ 50
  2. Goods worth ₹ 50 purchased from Vinod were entered in the Sales book. The account of Vinod was correctly credited
  3. A credit balance of ₹ 378 of Rent received account was shown as ₹ 285
  4. Goods worth ₹ 65 returned by Zeena were entered in the Sales book and were posted there from the credit of Zeena’s personal account
  5. Bills receivable from Utsav of ₹ 800 was posted to the credit of Bills Payable account and also credited to Utsav
  6. An amount of ₹ 400 due from a customer had been omitted from the list of Sundry Debtors
  7. A credit item of ₹ 175 had been debited to a personal account of a customer as ₹ 220
  8. A discount allowed to a customer had been credited to him as ₹ 73 in place of ₹ 77
  9. Total sales of ₹ 297 had been posted as ₹ 247 in the Sales account
  10. Discounts received of ₹ 710 had been debited to discount allowed
  11. Cash received from Viswa ₹ 360 was posted to the debit of Yatish as ₹ 135

Solution:


Dr. Suspense Account Cr.

Particulars

Particulars

To Wilson’s A/c

25

By Difference in Trial Balance

250

To Rent Received A/c

93

By Purchase A/c

50

To Customer’s A/c

395

By Sales A/c

50

To Customer’s A/c

4

By Sales A/c

65

To Sales A/c

50

By Return Inwards A/c

65

To Discount Allowed A/c

710

By Bills Payable A/c

800

To Discount received A/c

710

By Bills Receivables A/c

800

To Yatish’s A/c

135

By Sundry Debtors A/c

400

To Vishwa’s A/c

360

By Balance c/d

2

 

2,482

 

2,482


Illustration 4 [Rectification of errors of partial omission at stage 2]

 

An accountant of a trading concern (dealing in Stationary) provides you the details of various errors discovered as after transferring the difference in the Trial Balance. You are required to pass necessary journal entries to rectify the errors

  1. The Purchases book was under cast by ₹ 36
  2. The debit side of ‘Whaman’ a debtor, was overcast by ₹ 3,500
  3. The total of Sales book carried forward was ₹ 6,500 less on page 5 and ₹ 7,000 more on page 7
  4. Total of Sales book ₹ 1,000 was omitted to be posted
  5. A credit sale to Walmiki, ₹ 9 was omitted to be postedto Walmiki’s account.
  6. A credit sale to Vincent, ₹ 9 was posted as ₹ 36 to Vincent’s account.
  7. A credit sale to Yamuna ₹ 9 was debited as ₹ 36 to Yamuna’s account.
  8. A credit sale to Rita’s ₹ 9 was credited as ₹ 36 to Rita’s account.
  9. A cash sale to Mohanta ₹ 9 was omitted to be postedin sales account.
  10. A cash sale to Suraj ₹ 9 was posted as ₹ 36 to sales account.
  11. A cash sale to Pragati ₹ 9 was debited as ₹ 36 to sales account.
  12. A cash sale to Madhu ₹ 9 was credited as ₹ 36 to sales account.
  13. A credit sale of furniture to Munish for ₹ 30 was debited as ₹ 8 to Munish’s account.
  14. A credit sale of furniture to Kunal for ₹ 30 was credited as ₹ 8 to Furniture account.

Solution:
 

Date

Particulars

L.F.

Debit ()

Credit ()

(a)

Purchases A/c         Dr.

 

36

 

   To Suspense A/c

(Being the mistake in totalling, now rectified)

 

 

36

 

(b)

Suspense A/c         Dr.

 

3,500

 

 

  To Whaman’s A/c

(Being the mistake in totalling the debit side, now rectified)

 

 

3,500
 

(c)

Sales A/c         Dr.

 

500

 

 

   To Suspense A/c

(Being the mistake in totalling on page 5 and page 7, now rectified with the net effect)

 

 

500
 

(d)

Suspense A/c         Dr.

 

1,000

 

   To Sales A/c

(Being omission in posting, now rectified)

 

 

1,000
 

(e)

Walmiki’s A/c         Dr.

 

9

 

   To Suspense A/c

(Being omission in posting, now rectified)

 

 

9

 

(f)

Suspense A/c         Dr.

 

27

 

   To Vincent’s A/c

(Being the mistake in posting to Vincent’s A/c, now rectified)

 

 

27
 

(g)

Suspense A/c         Dr.

 

27

 

   To Yamuna’s A/c

(Being the mistake in posting to Yamuna’s A/c, now rectified)

 

 

27
 

(h)

Rita’s A/c         Dr.

 

45

 

   To Suspense A/c

(Being the mistake in posting to Rita’s A/c, now rectified)

 

 

45
 

(i)

Suspense A/c         Dr.

 

9

 

   To Sales A/c

(Being omission in posting, now rectified)

 

 

9

 

(j)

Sales A/c         Dr.

 

22

 

   To Suspense A/c

(Being the mistake in posting to Sales A/c, now rectified)

 

 

22
 

(k)

Suspense A/c         Dr.

 

22

 

   To Sales A/c

(Being the mistake in posting the Sales A/c, now rectified)

 

 

22
 

(l)

Sales A/c         Dr.

 

45

 

   To Suspense A/c

(Being the mistake in posting to Sales A/c, now rectified)

 

 

45
 

(m)

Munish’s A/c         Dr.

 

22

 

   To Suspense A/c

(Being the mistake in posting to M’s A/c, now rectified)

 

 

22
 

 

(n)

Suspense A/c         Dr.

 

22

 

    To Furniture A/c

(Being the posting to Furniture A/c, now rectified)

 

 

22

 

Two sided error

If the errors are two sided then it is rectified by cancelling the wrong effect and recording the right effect in respective accounts.

 

The following procedure may be adopted to ascertain the rectifying entry:

 

Step 1: Write the wrong entry (i.e., entry which has already been passed in the books)

 

Step 2: Write the reverse of the wrong entry to nullify the effect of the wrong entry

 

Step 3: Write the correct entry (i.e., the entry which should have been passed in the books)

 

Step 4: Write the net effect of the reverse entry (as per Step 2) and the correct entry (as per step 3)

 

Note: It is same as in Stage 1 – two sided error


Illustration 5 [Rectification of errors of recording]

Pass the necessary journal entries to rectify the following errors in the books of a trader who deals in sarees:

  1. A credit sale of ₹ 85 to Amit was recorded as ₹ 355
  2. A credit sale of ₹ 85 to Bhavik was recorded as sale to David
  3. A credit sale of ₹ 85 to Varun was recorded as sale to Yashi as ₹ 355
  4. A credit sale of ₹ 85 to Roshan was recorded in the Purchases book
  5. A credit sale of old machinery to Ankit for ₹ 85 was entered in the Sales book for ₹ 355
  6. A credit sale of old furniture to Carel for ₹ 85 recorded as ₹ 355
  7. A cash sale of ₹ 85 to Esmily was recorded as ₹ 355.
  8. A bill receivable of ₹ 85 received from Fara was entered in Bills Payable book.

Solution:
 

Sl. No.

Wrong Entry

Reverse of Wrong Entry

Correct Entry

Rectifying Entry

(a)

Amit’s A/c      Dr.  ₹ 355

Sales A/c Dr. ₹ 355

Amit’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 270

To Sales A/c ₹ 355

To Amit’s A/c ₹ 355

To Sales A/c ₹ 85

To Amit’s A/c ₹ 270

(b)

David’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 85

Bhavik’s A/c Dr. ₹ 85

Bhavik’s A/c Dr. ₹ 85

To Sales A/c ₹ 85

To David’s A/c ₹ 85

To David’s A/c ₹ 85

To David’s A/c ₹ 85

(c)

Yashi’s A/c Dr. ₹ 355
 

Sales A/c Dr. ₹ 355
 

Varun’s A/c Dr. ₹ 85
 

Sales A/c Dr. ₹ 270

 

Varun’s A/c Dr. ₹ 85

 To Sales A/c ₹ 355

 To Yashi’s A/c ₹ 355

  To Sales A/c ₹ 85

To Yashi’s A/c ₹ 355

(d)

Purchases A/c Dr. ₹ 85

Roshan’s A/c Dr. ₹ 85

Roshan’s A/c Dr. ₹ 85

Roshan’s A/c Dr. ₹ 170

 To Roshan’s A/c ₹ 85

 

 To Purchases A/c ₹ 85

 

 To sales A/c ₹ 85

 

 To Purchase A/c ₹ 85

 To Sales A/c ₹ 85

(e)

Ankit’s A/c Dr. ₹ 355

Sales A/c Dr. ₹ 355

Ankit’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 355

 To Sales A/c ₹ 355
 

 To Ankit’s A/c ₹ 355

 

 To Machinery A/c ₹ 85

 

 To Ankit’s A/c ₹ 270

 To Machinery A/c ₹ 85

(f)

Carel’s A/c Dr. ₹ 355

Furniture A/c Dr. ₹ 355

Carel’s A/c Dr. ₹ 85

Furniture A/c Dr. ₹ 270

  To Furniture A/c ₹ 355

  To Carel’s A/c ₹ 355

  To Furniture A/c ₹ 85

  To Carel’s A/c ₹ 270

(g)

Cash A/c Dr. ₹ 355

Sales A/c Dr. ₹ 355

Cash A/c Dr. ₹ 85

Sales A/c Dr. ₹ 270

  To Sales A/c ₹ 355

  To Cash A/c ₹ 355

  To Sales A/c ₹ 85

  To Cash A/c ₹ 270

(h)

Fara’s A/c Dr. ₹ 85

 

B/ PA/c Dr. ₹ 85

 

B/R A/c Dr. ₹ 85

 

B/P A/c   Dr. ₹ 85

B/R A/c   Dr. ₹ 85

  To B/P A/c ₹ 85

  To Fara’s A/c ₹ 85

  To Fara’sA/c ₹ 85

  To Fara’s A/c ₹ 170


Illustration 6 [Rectification of two sided errors of posting]


Pass the necessary journal entries to rectify the following errors

  1. A credit sale of ₹ 85 to Brinda was posted to Dolly’s account
  2. A cash sale of ₹ 85 to Vijay was posted to the credit of Vijay
  3. A credit sale of old furniture to Suraj for ₹ 85 was credited to Sales account
  4. A cheque for ₹ 64 received from Amar was dishonoured and has been posted to the debit of Sales Return account
  5. An amount of ₹ 286 due from Bimla, written off as bad in a previous year, was recovered and credited to the personal account of Bimla
  6. A discounted bill of exchange (receivable) for ₹ 800 returned by the firm’s bank had been credited to the Bank account and debited to Bills Receivable account. A cheque was received later from the customer for ₹ 800 and duly paid
  7. ₹ 2,000 paid for the telephone bill of the telephone at the proprietor’s residence was debited to Postage account
  8. An amount of ₹ 750 withdrawn from bank by the proprietor for his personal use was charged to Trade Expenses account
  9. An amount of ₹ 1,500 withdrawn from bank by the proprietor for office use was debited to Drawings account
  10. ₹ 800 paid as salary to Hema, an employee debited to Isha
  11. ₹ 1,000 paid as Rent to Chetna, a landlord, debited to Chetna

Solution:
 

Sl. No.

Wrong Entry

Reverse of Wrong Entry

Correct Entry

Rectifying Entry

(a)

Dolly’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 85

Brinda’s A/c Dr. ₹ 85

Brinda’s A/c Dr. ₹ 85

To Sales A/c ₹ 85

To Dolly’s A/c ₹ 85

To Sales A/c ₹ 85

To Dolly’s A/c ₹ 85

(b)

Cash A/c  Dr. ₹ 85

Vijay’s A/c  Dr. ₹ 85

Cash A/c  Dr. ₹ 85

Vijay’s A/c  Dr. ₹ 85

To Vijay’s ₹ 85

To Cash A/c ₹ 85

To Sales A/c ₹ 85

To Sales A/c ₹ 85

(c)

Suraj’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 85

Suraj’s A/c Dr. ₹ 85

Sales A/c Dr. ₹ 85

To Sales A/c ₹ 85

To Suraj’s A/c ₹ 85

To Furniture A/c ₹ 85

To Furniture A/c ₹ 85

(d)

Sales Return A/c Dr. ₹ 64

Bank A/c Dr. ₹ 64

Amar’s A/c Dr. ₹ 64

Amar’s A/c Dr. ₹ 64

To Bank A/c ₹ 64 To Sales Return A/c ₹ 64 To Bank A/c ₹ 64 To Sales Return A/c₹ 64

(e)

Bank A/c Dr. ₹ 286

Bimla’s A/c Dr. ₹ 286

Bank A/c Dr. ₹ 286

Bimla’s A/c Dr. ₹ 286

 

To Bimla’sA/c ₹ 286

To Bank A/c ₹ 286

To B/D Recovery A/c  ₹ 286

To B/D RecoveryA/c ₹ 286

(f)

B/R A/c Dr. ₹ 800

Bank A/c Dr. ₹ 800

Customer’s A/c Dr. ₹ 800

Customer’s A/c Dr. ₹ 800

To Bank A/c ₹ 800

To B/R A/c ₹ 800

To Bank A/c ₹ 800

To B/R A/c ₹ 800

(g)

Postage A/c Dr. ₹ 2,000

Cash A/c Dr. ₹ 2,000

Drawings A/c Dr. ₹ 2,000

Drawings A/c Dr. ₹2,000

To Cash A/c ₹ 2,000

To Postage A/c ₹ 2,000

To Cash A/c ₹ 2,000

To Postage A/c ₹ 2,000

(h)

Trade Exp. A/c Dr. ₹ 750

Bank A/c Dr. ₹ 750

Drawings A/c Dr. ₹ 750

Drawings A/c Dr. ₹ 750

To Bank A/c ₹ 750

To Trade Exp. A/c ₹ 750

To Bank A/c ₹ 750

To Trade Exp. A/c ₹ 750

(i)

Drawings A/c Dr ₹ 1,500

Bank A/c Dr. ₹ 1,500

Cash A/c Dr. ₹ 1,500

Cash A/c Dr. ₹ 1,500

To Bank A/c ₹ 1,500

To Drawings A/c ₹ 1,500

To Bank A/c ₹ 1,500

To Drawings A/c ₹ 1,500

(j)

Isha’s A/c Dr. ₹ 800

Cash A/c Dr. ₹ 800

Salary A/c Dr. ₹ 800

Salary A/c Dr. ₹ 800

To Cash A/c ₹ 800

To Isha’s A/c ₹ 800

To Cash A/c ₹ 800

To Isha’s A/c ₹ 800

(k)

Chetan’s A/c Dr. ₹ 1,000

Cash A/c Dr. ₹ 1,000

Rent A/c Dr. ₹ 1,000

Rent A/c Dr. ₹ 1,000

To Cash A/c ₹ 1,000

To Chetan’s A/c ₹ 1,000

To Cash A/c ₹ 1,000

To Chetan’s A/c ₹ 1,000


Illustration 7 [Rectification of errors of omission]

 

Pass the necessary journal entries to rectify the following errors:

  1. A credit sale of ₹ 85 to Xaveir omitted to be recorded in the books
  2. A credit sale of old furniture to Yashi for ₹ 85 omitted to be posted
  3. Goods (Cost ₹ 500, Sale price ₹ 600) taken away by the proprietor were not recorded anywhere
  4. Goods (Cost ₹ 1,000, Sale price ₹ 1,100) distributed as free samples among prospective customers were not recorded anywhere
  5. Goods (Cost ₹ 1,500, Sale price ₹ 1,800) were returned by Mohan, a customer and were taken into stock on the same date, but no entry was passed in the books
  6. Materials from store of ₹ 500 and wages ₹ 200 had been used in making tools and implements for use in own factory, but no adjustments were made in the books
  7. Outstanding telephone charges ₹ 330 had been completely omitted

Solution:
 

Date

Particulars

L.F.

Debit ()

Credit ()

(a)

Xavier’s A/c         Dr.

 

85

 

   To Sales A/c

(Being a credit sale omitted to be recorded, now recorded)

 

 

85

(b)

Yashi’s A/c         Dr.

 

85

 

   To Furniture A/c

(Being a credit sale of furniture omitted to be posted, now posted)

 

 

85

(c)

Drawings A/c         Dr.

 

500

 

   To Purchases A/c

(Being goods taken away by the proprietor omitted to be recorded, now recorded)

 

 

500
 

(d)

Free Samples/Advertisement A/c         Dr.

 

1,000
 

 

   To Purchases A/c

(Being goods distributed as free samples omitted to be recorded, now recorded)

 

 

1,000

(e)

Sales Returns A/c          Dr.

 

1,800

 

   To Mohan’s A/c

(Being sales returns omitted to be recorded, now recorded)

 

 

1,800

(f)

Tools and Implements A/c        Dr.

 

700

 

   To Purchases A/c

   To Cash A/c

(Being materials and wages used in making tools, omitted to be adjusted, now adjusted)

 

 

500

200 

(g)

Telephone Charges A/c      Dr.

 

330

 

  To Outstanding telephone charges A/c

(Being outstanding telephone charges omitted to be recorded, now recorded)

 

 

330





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