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Question -

Trial balance of Anuj did not agree. It showed an excess credit of Rs 6,000.
He put the difference to suspense account. He discovered the following errors.
(a) Cash received from Ravish Rs 8,000 posted to his account as Rs 6,000.
(b) Returns inwards book overcast by Rs 1,000.
(c) Total of sales book Rs 10,000 was not posted to Sales account.
(d) Credit purchases from Nanak Rs 7,000 were recorded in sales Book. However, Nanak’s account was correctly credited.
(e) Machinery purchased for Rs 10,000 was posted to purchases account as Rs 5,000. Rectify the errors and prepare suspense account.



Answer -

Journal Recordings to rectify the errors

 

Date

Particulars

L.F

Debit
Amount

Credit
Amount

i.

Suspense A/c Dr.

2,000

To Ravish A/c

(Cash received from Ravish, Error rectification recording, was wrongly posted as ₹ 6,000 instead of ₹ 8,000)

2,000

ii.

Suspense A/c Dr.

1,000

To Return Inward A/c

(Returns inwards book was overcast by ₹ 1,000, Error rectification recording)

1,000

iii.

Suspense A/c Dr.

10,000

To Sales A/c

(Total of sales book, Error rectification recording, was not posted to sales account earlier)

10,000

iv.

Purchases A/c Dr.

7,000

Sales A/c Dr.

7,000

To Suspense A/c

(Credit purchases from Nanak, Error rectification recording, was recorded in sales book)

14,000

v.

Purchases A/c Dr.

10,000

To Purchases A/c

5,000

To Suspense A/c

(Machinery purchased for ₹ 10,000, Error rectification recording, was posted to purchases account as ₹ 5,000)

5,000

 

Suspense Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

To Balance c/d

6,000

By Purchases A/c

7,000

To Ravish A/c

2,000

By Sales A/c

7,000

To Return Inwards A/c

1,000

By Machinery A/c

5,000

To Sales A/c

10,000

Total

19,000

Total

19,000

Hence, total ofsuspense account is ₹ 19,000

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