Pass the Journal entries to rectify the following errors detected during preparation of the Trial Balance: (i) Wages paid for construction of office…

CA Foundation · Accounting · RTP · September 2024
Pass the Journal entries to rectify the following errors detected during preparation of the Trial Balance: (i) Wages paid for construction of office building debited to wages account - 20,000. (ii) A credit sale of goods - 1,200 to Ramesh has been wrongly passed through the Purchase Book. (iii) An amount of 2,000 due from Mahesh Chand which had been written off as a bad debit in the previous year was unexpectedly recovered and has been posted to the personal account of Mahesh Chand . (iv) Goods (Cost being - 15,000 and Sales price being - 16,000) distributed as free samples amount prospective customers were not recorded anywhere . (v) Goods worth - 1,500 returned by Ritu have not been recorded anywhere.

Suggested Answer and Working Notes:

Journal Particulars L.F. Dr. ₹ Cr. ₹ (1) Building A/c Dr. 20,000 To Wages A/c 20,000 (Being correction of wrong debit in the wages A/c of the construction of office building) (2) Ramesh Dr. 2,400 To Purchases A/c 1,200 To Sales A/c 1,200 (Being correction of wrong entry in the Purchases Book of a credit sale of goods to Ramesh) (3) Mahesh Chand Dr. 2,000 To Bad Debts Recovered A/c 2,000 (Being correction of wrong credit to Personal A/c in respect of recovery of previously written off bad debts) (4) Advertisement expenses or Sales Promotion or Free Samples A/c Dr. 15,000 To Purchases A/c 15,000 (Being entry of the goods distributed as free samples omitted from records) (5) Returns Inwards /Sales Return A/c Dr. 1,500 To Green 1,500 (Being entry of goods returned by Ritu omitted from records)

Topics: Rectification of Errors

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