Give journal entries to rectify the following errors located in the books of a trader after preparing the trial balance: (i) An amount of 13,500…

CA Foundation · Accounting · MTP · June 2024
Give journal entries to rectify the following errors located in the books of a trader after preparing the trial balance: (i) An amount of 13,500 received on account of interest was credited to commission account. (ii) A sale of 5,920 was posted from sales book to the debit of M/s Kamal traders at 5,290. (iii) ₹ 44,000 paid for purchase of Air conditioner for the personal use of proprietor debited to Machinery A/c. (iv) Goods returned by customer for 20,000. The same have been taken into stock but no entry passed in the books of accounts.

Suggested Answer and Working Notes:

S. No. Particulars Debit (₹) Credit (₹) 1 Commission A/c Dr. 13,500 To Interest Received 13,500 (Correcting wrong entry of interest received into commission account) 2 M/s Kamal Traders A/c Dr. 630 To Suspense A/c 630 (Being credit sale of 5,920 posted as 5,290 i.e. debiting M/s Kamal Traders A/c less by 630, now rectified) 3 Drawing A/c Dr. 44,000 To Machinery A/c 44,000 (Correction of wrong debit to machinery account for purchase of air-conditioner for personal use) 4 Return Inward A/c Dr. 20,000 To Debtors (Personal) A/c 20,000 (Correction of omission to record return of goods by customers)

Topics: Rectification of Errors

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