The accountant of Angad Traders was unable to agree the Trial Balance as on 31 st March, 2026 and transferred the difference to Suspense Account. On…

CA Foundation · Accounting · PYQS · May 2026
The accountant of Angad Traders was unable to agree the Trial Balance as on 31 st March, 2026 and transferred the difference to Suspense Account. On examination of the books of account, you observe that the accountant had committed the following errors: (i) Goods of the value of 15,000 returned by Mr. Arora were entered in the Sales Day Book and posted therefrom to the credit of his account. (ii) An amount of 3,000 entered in the Sales Return Book has been posted to the debit of Mr. Radhey, who returned the goods. (iii) Wages of 4,600 paid to workmen for making furniture on 31 st March, 2026 had been charged to Wages Account. (iv) A cheque of 12,000 received from Janak Enterprises has been dishonored and was passed to the debit of Allowances Account. (v) Goods amounting to 1,600 had been returned by a customer, J V Corporation and were taken into inventory, but no entry in respect thereof was made into the books. (vi) A second-hand motor car purchased for 30,000 on 1 st October, 2025 was debited to Car Maintenance Account. Angad Traders charges depreciation @15% p.a. on Written Down Value of vehicles. (vii) On 31 st March, 2026, old furniture sold for 16,000 has been entered in the Sales book, the total of which had been posted to Sales account. (viii) An amount of 8,880 due from Hemal, which had been written off as a Bad Debt in a previous year, was unexpectedly recovered, and had been posted to the personal account of Hetal. (ix) The total of "Discount Allowed" column in the cash book for the month of March, 2026 amounting to 2,500 was not posted. (x) A sum of 3,500 paid towards Mediclaim Insurance of the proprietor had been charged off to Employees Benefits Expenses Account. You are required to pass the necessary accounting entries in the books of Angad Traders to rectify the aforesaid errors.

Suggested Answer and Working Notes:

In the Books of Angad Traders Journal Entries Particulars L.F. Dr. ₹ Cr. ₹ (i) Sales Return/Return Inward A/c Dr. 15,000 Sales A/c Dr. 15,000 To Suspense A/c 30,000 (Being sales return wrongly posted to sales a/c now rectified) (ii) Suspense A/c Dr. 6,000 To Mr. Radhey 6,000 (Being sales return to Mr. Radhey wrongly posted to the debit of Mr. Radhey now rectified) (iii) Furniture A/c Dr. 4,600 To Wages A/c 4,600 (Being the wages paid to workmen for making furniture wrongly charged to Wages Account now rectified) (iv) Janak Enterprises A/c Dr. 12,000 To Allowances A/c 12,000 (Being the cheque of Janak Enterprises dishonoured, previously debited to Allowances Account now rectified) (v) Returns Inward /Sales Return A/c Dr. 1,600 To J V Corporation A/c / Customers A/c 1,600 (Being goods return of goods by customers omitted to be recorded now rectified) (vi) (a) Motor Car A/c Dr. 30,000 To car maintenance A/c 30,000 (Being purchase of car wrongly debited to maintenance account now rectified) (b) Depreciation A/c Dr. 2,250 To Motor Car A/c 2,250 (Being depreciation on Car recorded for the half year) (vii) Sales A/c Dr. 16,000 To Furniture A/c 16,000 (Being sale of furniture recorded as sales of goods now rectified) (viii) Hetal’s A/c Dr. 8,880 To Bad Debts Recovered A/c 8,800 (Being recovery of previously written off bad debts wrongly credited to Personal A/c now rectified) (ix) Discount Allowed A/c Dr. 2,500 To Suspense A/c 2,500 (Being Discount allowed total not posted from the Cash Book, now rectified) (x) Drawings A/c Dr. 3,500 To employee benefit expenses A/c 3,500 (Being Mediclaim of the proprietors wrongly charged to employee benefit expenses A/c now rectified)

Topics: Rectification of Errors

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