Following errors were found in the books of XYZ. Give necessary entries to correct them: (i) A purchase of goods from R amounting to 10,000 has been…

CA Foundation · Accounting · PYQS · May 2025
Following errors were found in the books of XYZ. Give necessary entries to correct them: (i) A purchase of goods from R amounting to 10,000 has been wrongly entered through the sales book. (ii) Furniture purchased for office use amounting to 25,000 has been entered in the purchase day book. (iii) Minor repairs to the Furniture Account amounting to 1,500 were debited to Furniture Account. (iv) Wages amounting to 3,000 paid to workmen for making Office Furniture has been charged to wages account. (v) Tuition Fees of proprietor’s son - 25,000 has been debited to Audit fees A/c. (vi) An amount of 10,000 due from Mohan which had been written off as bad debt in the previous year was unexpectedly recovered and has been posted to the personal account of Mohan. (vii) Goods (Cost being - 7,000 and sales price being - 10,000) distributed as free samples among prospective customers were not recorded anywhere. (viii) Goods amounting to 1,000 returned by a customer, G & Co. were entered in the Sales Day Book and posted there from to the credit of his account. (ix) A bill of Exchange (received from SS & Co.) for 10,000 had been returned by the bank as dishonoured and had been credited to the bank and debited to bills receivable account. (x) A Bills Receivable for 2,500 was passed through Bills Payable Book. The Bill was given by Jack.

Suggested Answer and Working Notes:

In the books of XYZ Journal Particulars L.F. Dr. ₹ Cr. ₹ (i) Purchases A/c Dr. 10,000 Sales A/c Dr. 10,000 To R 20,000 (Purchases from R wrongly entered in Sales Book now rectified) (ii) Furniture A/c Dr. 25,000 To Purchases A/c 25,000 (Furniture purchased was wrongly debited to purchases daybook now rectified) (iii) Repairs A/c Dr. 1,500 To Furniture A/c 1,500 (Minor repairs to the furniture wrongly debited to furniture now rectified) (iv) Furniture A/c Dr. 3,000 To Wages A/c 3,000 (Wages paid for making furniture wrongly charged to wages now rectified) (v) Drawings A/c Dr. 25,000 To Audit Fees A/c 25,000 (Tuition fees of proprietor’s son wrongly debited to Audit fees A/c now rectified) (vi) Mohan A/c Dr. 10,000 To Bad Debts Recovered A/c 10,000 (Bad debts recovered had been wrongly posted to Personal A/c now rectified) (vii) Advertisement Expenses/Free Sample A/c Dr. 7,000 To Purchases A/c 7,000 (Goods distributed as free samples were not recorded anywhere now rectified) (viii) Returns Inwards / Sales Return A/c Dr. 1,000 Sales A/c Dr. 1,000 To Suspense A/c 2,000 (Goods returned wrongly posted to sales book now rectified) (ix) SS & Co A/c Dr. 10,000 To Bills Receivable A/c 10,000 (Bills of Exchange dishonoured and had credited to bank and debited to Bills receivable a/c now rectified) (x) Bills Receivable A/c Dr. 2,500 Bills Payable A/c Dr. 2,500 To Jack A/c 5,000 (Bills receivable wrongly passed through Bills payable now rectified)

Topics: Rectification of Errors

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