Chapter 6 Trial Balance and Rectification of Errors Solutions
Question - 11 : - Explain the errors of commission and give two examples with measures to rectify them.
Answer - 11 : -
Errors of commissionrefer to those errors that are committed when transactions are recorded withwrong amounts, wrong balancing, and wrong posting and/or wrongly carriedforwarded. The following examples will illustrate the process of understandingand rectification of such errors.
- Let us consider the first example. Sales made to Mr. Y of Rs10, 000 recorded as 1,000 from invoice.
In this case, Mr. Y’saccount has been debited with Rs 1,000 instead of Rs 10,000; hence, the errorof commission has taken place. A further debit of Rs 9,000, is required inorder to rectify this error of commission. The following entry will rectify it:
| Mr Y’s A/c | Dr. | 9,000 | |
| To Sales A/c | | | 9,000 |
| (Goods sold to Mr Y of Rs 10,000 was wrongly posted as Rs 1,000,now rectified) | | |
| | | | |
2. Sales returns fromManu for Rs. 1,500 was posted to his account as Rs. 1,000
In this case, Manu’saccount is credited with 1000 instead of 1,500, so the rectification entryshould be
Suspense A/c Dr. 500
To Manu’s A/c 500
Question - 12 : - What are the different types of errors that are usually committed in recording business transaction?
Answer - 12 : -
Here are some of the types of errors that are committed in recording business transactions:
1. Errors of omission: Error of omission is committed when an entry gets omitted during recording in the book of original entry or during posting of the transaction. Two types of errors of omission are there, namely,
Partial omission: A transaction that is correctly recorded in one side of account but not recorded in the other side of the account. For example, goods sold to Manjunath recorded in sales but omitted to be recorded in Manjunath’s account. It affects the trial balance.
Complete omission: When a transaction gets completely omitted to be recorded in the books, then it is the case of complete omission. For example, transaction related to purchase of goods from Rajesh is not recorded in the purchases book. Such omissions does not affect the trial balance.
2. Errors of principle: Errors committed when recording of transactions in the book of the original entry is done against the accounting principle. Such errors affect the trial balance.
When proper distinction is not made between revenue income or expenditure and capital income or expenditure. These are of two types:
When revenue transactions are treated as capital transactions and when capital transactions are treated as revenue transactions. For example, repairs made to machinery, recorded in machinery account.
3. Errors of commission: Errors committed when transactions are recorded with wrong amounts, wrong posting, wrong balancing, and/or wrongly carry forwarded.
These are of two types:
Trial balance does not agree: One sided errors result when trial balance does not agree, it affects one account
Trial balance agrees: When the trial balance agrees it should not be thought that there is no error. Although arithmetic errors will not be there, but there can be some other types of errors which are not easily detectable. These errors arise due to recording wrong amount in the original book.
4. Compensating errors: Compensating errors occur when effects of one error are cancelled by the effects of another error of an equal amount. For example, Mr. Y’s account was credited by Rs 1,000 instead of 100 and Mr. Z’s account was credited by Rs 100 instead of 1,000. In this case, the error in Mr. Y’s account will be compensated by the error in Mr. Z’s account.
Question - 13 : - As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of Rs. 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pen-drive for Rs 3,500 was posted from the journal to the ledger with a Rs. 3,500 debit to Office Equipment and another Rs. 3,500 debit to creditor’s accounts. Answer each of the following questions and present the amount of any misstatement:
(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?
(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?
(c) Is the debit column total of the trial balance overstated, understated, or correctly stated?
(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?
(e) If the debit column total of the trial balance is Rs. 2, 40,000 before correcting the error, what is the total of credit column?
Answer - 13 : -
According to the given information, trial balance does not agree. Pen-drive falls under stationery and is wrongly debited to office equipment account, instead of stationery account and also supplier account is debited instead of crediting. Due to these mistakes, the following errors are committed:
- The balance of office equipment is overstated by Rs 3,500.
- The balance of creditors account is understated by Rs 7,000.
- The total of the debit column of the trial balance is correctly stated.
- The total of the credit column of the trial balance is understated by Rs 7,000.
- If the total of the debit column of the trial balance is Rs 2,40,000 then before rectifying error, total of the credit column of the trial balance is Rs 2,33,000 (i.e., Rs 2,40,000 − Rs 7,000).
Question - 14 : - Rectify the following errors:
(i) Credit sales to Mohan Rs 7,000 were not recorded.
(ii) Credit purchases from Rohan Rs 9,000 were not recorded.
(iii) Goods returned to Rakesh Rs 4,000 were not recorded.
(iv)Goods returned from Mahesh Rs 1,000 were not recorded.
Answer - 14 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Mohan’s Account Dr. | | 7,000 | |
| | To Sales A/c (Credit Sales to Mohan, Error rectification recording, not recorded earlier) | | | 7,000 |
| ii. | | Purchases Account Dr. | | 9,000 | |
| | To Rohan’s A/c (Credit purchases from Rohan, Error rectification recording, not recorded earlier) | | | 9,000 |
| iii. | | Rakesh’s Dr. | | 4,000 | |
| | To Purchases Return A/c (Purchases return to Rakesh, Error rectification recording, not recorded earlier) | | | 4,000 |
| iv. | | Sales Return A/c Dr. | | 1,000 | |
| | To Mahesh’s A/c (Purchases return from Mahesh, Error rectification recording, not recorded earlier) | | | 1,000 |
Question - 15 : - Rectify the following errors:
(i) Credit sales to Mohan Rs 7,000 were recorded as Rs 700.
(ii) Credit purchases from Rohan Rs 9,000 were recorded as Rs 900.
(iii) Goods returned to Rakesh Rs 4,000 were recorded as Rs 400.
(iv) Goods returned from Mahesh Rs 1,000 were recorded as Rs 100.
Answer - 15 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Mohan’s Account Dr. | | 6,300 | |
| | To Sales A/c (Credit Sales to Mohan, Error rectification recording, ₹ 7,000 was recorded as ₹ 700) | | | 6,300 |
| ii. | | Purchases Account Dr. | | 8,100 | |
| | To Rohan’s A/c (Credit purchases from Rohan, Error rectification recording, ₹ 9,000 was recorded as ₹ 900) | | | 8,100 |
| iii. | | Rakesh’s Account Dr. | | 3,600 | |
| | To purchases return A/c (Goods returned to Rakesh, Error rectification recording, ₹ 4,000 was recorded as ₹ 400) | | | 3,600 |
| iv. | | Sales Return Account Dr. | | 900 | |
| | To Mahesh’s A/c (Goods returned from Mahesh, Error rectification recording, ₹ 1,000 was recorded as ₹ 100) | | | 900 |
Question - 16 : - Rectify the following errors:
(i) Credit sales to Mohan Rs 7,000 were recorded as Rs 7,200.
(ii) Credit purchases from Rohan Rs 9,000 were recorded as Rs 9,900.
(iii) Goods returned to Rakesh Rs 4,000 were recorded as Rs 4,040.
(iv) Goods returned from Mahesh Rs 1,000 were recorded as Rs 1,600.
Answer - 16 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Sales A/c Dr. | | 200 | |
| | To Mohan’s A/c (Credit Sales to Mohan, Error rectification recording, ₹ 6,000 was recorded as ₹ 6,200) | | | 200 |
| ii. | | Rohan’s A/c Dr. | | 900 | |
| | To Purchases A/c (Goods purchased from Rohan, Error rectification recording, ₹ 9,000 was recorded as ₹ 9,900) | | | 900 |
| iii. | | Purchases Return A/c Dr. | | 40 | |
| | To Rakesh’s A/c (Goods returned to Rakesh, Error rectification recording, ₹ 4,040 was recorded as ₹ 4,000) | | | 40 |
| iv | | Mahesh’s A/c Dr. | | 600 | |
| | To Sales return A/c (Goods returned from Mahesh, Error rectification recording, ₹ 1,000 was recorded as ₹ 1,600) | | | 600 |
Question - 17 : - Rectify the following errors:
1. Salary paid Rs. 5,000 was debited to employee’s personal account.
2. Rent Paid Rs. 4,000 was posted to landlord’s personal account.
3. Goods withdrawn by proprietor for personal use Rs. 1,000 were debited to sundry expenses account.
4. Cash received from Kohli Rs. 2,000 was posted to Kapur’s account.
5. Cash paid to Babu Rs. 1,500 was posted to Sabu’s account.
Answer - 17 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Salary Account Dr. | | 5,000 | |
| | To Employee’s A/c (Salary paid to the employee, Error rectification recording, was erroneously credited to the employee’s personal account) | | | 5,000 |
| ii. | | Rent Account Dr. | | 4,000 | |
| | To Landlord’s A/c (Rent paid to the landlord, Error rectification recording, was erroneously credited to the landlord’s personal account) | | | 4,000 |
| iii. | | Drawings Account Dr. | | 1,000 | |
| | To Sundry Expenses A/c (Goods drawn by the proprietor for personal use, Error rectification recording, was erroneously debited to the sundry expenses account) | | | 1,000 |
| iv. | | Kapur’s Account Dr. | | 2,000 | |
| | To Kohli’s A/c (Cash received from Kohli, Error rectification recording, was erroneously posted to Kapur’s account) | | | 2,000 |
| v. | | Babu’s Account Dr. | | 1,500 | |
| | To Sabu’s A/c (Cash paid to Babu, Error rectification recording, was erroneously posted to Sabu’s account) | | | 1,500 |
Question - 18 : - Rectify the following errors:
(a) Credit Sales to Mohan Rs 7,000 were recorded in purchases book.
(b) Credit Purchases from Rohan Rs 900 were recorded in sales book.
(c) Goods returned to Rakesh Rs 4,000 were recorded in the sales return book.
(d) Goods returned from Mahesh Rs 1,000 were recorded in purchases return book.
(e) Goods returned from Nahesh Rs 2,000 were recorded in purchases book.
Answer - 18 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Mohan’s Account Dr. | | 14,000 | |
| | To Sales A/c | | | 7,000 |
| | To Purchases A/c (Credit Sales to Mohan, Error rectification recording, Was erroneously recorded in purchases book) | | | 7,000 |
| ii. | | Sales Account Dr. | | 900 | |
| | Purchases Account Dr. | | 900 | |
| | To Rohan’s A/c (Credit Purchases from Rohan, Error rectification recording, Was erroneously recorded in Sales book) | | | 1,800 |
| iii. | | Rakesh Account Dr. | | 8,000 | |
| | To Purchases Return A/c | | | 4,000 |
| | To Sales Return A/c (Goods returned to Rakesh, Error rectification recording, Was erroneously recorded in sales return book) | | | 4,000 |
| iv. | | Sales Return Account Dr. | | 1,000 | |
| | Purchases Return Account Dr. | | 1,000 | |
| | To Mahesh’s A/c (Goods returned from Mahesh, Error rectification recording, Was erroneously recorded in Purchases return book) | | | 1,800 |
| v. | | Sales Return A/c Dr. | | 2,000 | |
| | To Purchases A/c (Goods returned from Mahesh, Error rectification recording, Was erroneously recorded in Purchases book) | | | 2,000 |
Question - 19 : - Rectify the following errors:
(a) Sales book overcast by Rs 700.
(b) Purchases book overcast by Rs 500.
(c) Sales return book overcast by Rs 300.
(d) Purchase return book overcast by Rs 200.
Answer - 19 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Sales Account Dr. | | 700 | |
| | To Suspense A/c (Sales book overcast by ₹ 700, Error rectification recording) | | | 700 |
| ii. | | Suspense Account Dr. | | 500 | |
| | To Purchases A/c (Purchases book overcast by ₹ 500, Error rectification recording) | | | 500 |
| iii. | | Suspense Account Dr. | | 300 | |
| | To Sales Return A/c (Sales Return book overcast by ₹ 300, Error rectification recording) | | | 300 |
| i. | | Purchases Return Account Dr. | | 200 | |
| | To Suspense A/c (Purchases return book overcast by ₹ 700, Error rectification recording) | | | 200 |
Question - 20 : - Rectify the following errors:
(a) Sales book undercast by Rs 300.
(b) Purchases book undercast by Rs 400.
(c) Return Inwards book undercast by Rs 200.
(d) Return outwards book undercast by Rs 100.
Answer - 20 : -
| Journal Recordings to rectify the errors |
| | Date | Particulars | L.F | Debit
Amount
₹ | Credit
Amount
₹ |
| i. | | Suspense A/c Dr. | | 300 | |
| | To Sales A/c (Sales book is undercast by ₹ 300, Error rectification recording) | | | 300 |
| ii. | | Purchases A/c Dr. | | 400 | |
| | To Suspense A/c (Purchases book is undercast by ₹ 400, Error rectification recording) | | | 400 |
| iii. | | Return inwards A/c Dr. | | 200 | |
| | To Suspense A/c (Return inwards book is undercast by ₹ 200, Error rectification recording) | | | 200 |
| iv. | | Suspense A/c Dr. | | 100 | |
| | To Return outwards A/c (Return outwards book is undercast by ₹ 200, Error rectification recording) | | | 100 |