M/s. Samar Steels wires were unable to agree the Trial Balance as on 31st March, 2025 and have raised a suspense account for the difference. Next…

CA Foundation · Accounting · MTP · September 2025
M/s. Samar Steels wires were unable to agree the Trial Balance as on 31st March, 2025 and have raised a suspense account for the difference. Next year the following errors were discovered: (i) Repairs made during the year were wrongly debited to the building A/c -37,500. (ii) The addition of the 'Freight' column in the purchase journal was short by - 4,500. (iii) Goods to the value of 3,150 returned by a customer, alas & Co., had been posted to the debit of alas & Co. and also to sales returns. (iv) Sundry items of furniture sold for 90,000 had been entered in the sales book, the total of which had been posted to sales account. You are required to pass journal entries to rectify the above mistakes.

Suggested Answer and Working Notes:

Rectification entries in the books of M/s Samar Steels Particulars L.F. Dr. ₹ Cr. ₹ 1. Profit and Loss Adjustment A/c Dr. 37,500 To Building A/c 37,500 (Repairs amounting - 37,500 wrongly debited to building account, now rectified) 2. Profit and Loss Adjustment A/c Dr. 4,500 To Suspense A/c 4,500 (Addition of freight column in purchase journal was under casted, now rectification entry made) 3. Suspense Account Dr. 6,300 To Alas & Co. 6,300 (Goods returned by Alas & Co. had been posted wrongly to the debit of her account, now rectified) 4. Profit and Loss Adjustment A/c Dr. 90,000 To Furniture A/c 90,000 (Being sale of furniture wrongly entered in sales book, now rectified)

Topics: Rectification of Errors

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