Question

NCERT Solutions Class 11, Accountancy, Chapter- 6, Trial Balance and Rectification of Errors

For a deep understanding of Class 11 Accountancy and to excel in Board exams and competitive tests, using NCERT Solutions is strongly advised. Developed by experts, these solutions address all key concepts in the chapter. Specifically designed for the CBSE curriculum, they offer thorough coverage and essential support for your academic success.

In these NCERT Solutions for Class 11 Accountancy, we have discussed all types of NCERT intext questions and exercise questions.

Concepts covered in Class 11 Accountancy Chapter- 6 Trial Balance and Rectification of Errors, are:

• Meaning of Trial Balance
• Objectives of Preparing the Trial Balance
• To Ascertain the Arithmetical Accuracy of Ledger Accounts
• To Help in Locating Errors
• To Help in the Preparation of the Financial Statements
• Preparation of Trial Balance
• Totals method
• Balances Method
• Totals-cum-balances Method
• Significance of Agreement of Trial Balance
• Classification of Errors
• Errors of Commission

Our NCERT Solutions for Class 11 Accountancy offer detailed explanations to help students with their homework and assignments. Mastery and ample practice of the chapter’s concepts, as provided by these solutions, are the most effective ways to secure top marks in your exams. Start your preparation now to excel in your exams.

Easily access all solutions and practice questions to kickstart your preparation and ensure academic success.

Answer 1

NCERT Solutions Class 11, Accountancy, Chapter- 6, Trial Balance and Rectification of Errors

Short Answers

1. State the meaning of a Trial Balance.

Solution:

Trial Balance is a list of all general ledger accounts present in the ledger of a business; the main purpose of its creation is to verify the arithmetical accuracy of the accounts. It is carefully prepared after balancing all the accounts of the ledger. Trial Balance consists of two columns, the debit side consists of all the debit balances, and the credit side contains all the credit balances of the accounts.

2. Give two examples of errors of commission.

Solution:

'Errors of principle' refer to those errors that are committed when recording of transactions is done against the accounting principle.

Below given are the examples of error of principle

(i) Wages paid for construction of building debited to Wages Account

In this transaction, wages paid for the construction of building is a capital expenditure and accordingly building account should have been debited.

However, in this case, it is treated as revenue expenditure and is debited to Wages Account.

This error violates the accounting principle.

(ii) Amount spent on repair of machinery debited to Machinery Account

In this transaction, amount of repair is a revenue expenditure and not a capital expenditure. I

t should have been debited as ‘Repairs’, but was wrongly debited to the Machinery Account.

3. Give two examples of errors of principle.

Solution:

Errors that are committed when the recording of transactions is done against the accounting principle are known as Errors of principle. Here are some examples of the same.

(i) Wages paid for the construction of the building debited to the Wages Account

In this transaction, wages paid for the construction of the building is a capital expenditure, so the building account should have been debited. However, it is treated as a revenue expenditure and Wages Account is debited. It is not in accordance with the accounting principle and hence is an error.

(ii) Amount spent on repair of machinery debited to Machinery Account

In this transaction, the amount of repair on machinery is a revenue expenditure. It should have been debited as ‘Repairs’, but it is wrongly debited to the Machinery Account, which is an error of principle.

4. What are the methods of preparing trial balance?

Solution:

Below are diagrammatically explained methods to prepare Trial Balance.

The following are the methods of preparing trial balances.

Totals method: In the Totals method, the total of each side (debit and credit) of the ledger account is determined individually and it is then shown in the trial balance in each of the respective columns. Accounting is based on the double entry system. Therefore, the total of the debit column and the total of the credit column in the trial balance should be in agreement with each other.

Balances Method: In this method, the closing balances of all accounts are tabulated in a different sheet. In this method brought down balances are brought to this statement.

Totals-cum-balances Method: It utilises both the totals method and the balances method. There are four columns, of which two columns are for writing debit and credit totals of accounts, while two columns are for writing the debit and credit balances of these accounts.

5. What is a suspense account? Is it necessary that suspense account will balance off after rectification of the errors detected by the accountant? If not, then what happens to the balance still remaining in suspense account?

Solution:

There may be instances when the total of the debit column is not matching with that of the credit column. At that time, the difference of the trial Balance is added to a temporary account to avoid delay in the preparation of the financial statements. Such accounts are known as Suspense accounts. A suspense account is a temporary account in a company which contains unclassified debits and credits. If the debit column falls short of the credit column, then the Suspense Account is debited and vice versa.

Errors, as soon as detected and rectified, result in Suspense Account being automatically closed (i.e. becoming zero). However, if any difference still exists, then it is transferred to the Balance Sheet. If the Suspense Account shows a debit balance, then it is recorded on the Assets side, and if the Suspense Account shows a credit balance, then it is recorded on the Liabilities side of the Balance Sheet.

6. What are the steps taken by an accountant to locate the errors in the trial balance?

Solution:

An accountant can take the following steps to locate errors in the Trial Balance:

1. Determine the errors, if any, by re-recording debit and credit entries in the trial balance.
2. Check for any omission of account and record that entry in the trial balance.
3. Check trial balances of the previous year and compare them with the current year.
4. Check the correctness of all ledgers
5. Half the difference, then check whether any amount is posted in the wrong column of the Trial Balance.
6. Try to divide the difference by 9, if it is completely divisible, then it’s an error of transposition of the figure, i.e. 123 is written as 132.
7. Entries of Subsidiary Books should be checked once again if there is a difference of Rs 1, Rs 10, Rs 100, Rs 1000, etc. If a difference still exists and it is not possible to detect the reason for the difference, then, for the time being, that particular difference is transferred to the suspense account in order to proceed further.

7. What kinds of errors would cause difference in the trial balance? Also list examples that would not be revealed by a trial balance?

Solution:

The errors that lead to the differences in the Trial Balance are termed as one-sided errors. These errors affect only one account. Here are some types of errors that can cause difference in trial balance

1. If any account is wrongly casted, it is termed as the error of casting.
2. If balances from previous year’s books or from one end of the page to another are wrongly carried forward. These types of errors are termed errors in carrying forward.
3. If entries are posted on completely wrong side of the accounts.
4. Posting a wrong amount in the account is termed as an error of posting.
5. If entries are recorded partially, then due to the error of partial omission the trial Balance does not agree.

Here are a few examples that would not be revealed in a Trial Balance:

1. Purchases made from Raj, recorded in Rohit’s Account, who is another creditor
2. Wages paid for construction of building, recorded in the Wages Account

8. State the limitations of trial balance.

Solution:

There are some errors that are not revealed by a Trial Balance. This inadequacy of the Trial Balance is termed as the limitations of Trial Balance. Here are some of the limitations of a trial balance.

• It is unable to detect errors known as Errors of Complete Omission which arise when an entry is not recorded in the Journal.
• It is unable to detect errors known as Compensatory Errors which is the effect of one error that is cancelled by the effect of another error.
• The Trial Balance fails to reflect errors such as if correct amount is posted in the correct side, but in the wrong account and if the wrong amount is posted on the wrong side but in the correct account.
• It is unable to detect errors of principle that may take place in the account.
• It is unable to detect errors due to wrong entries in accounts, which can lead to errors.

Answer 2

Long Answers

1. Describe the purpose for the preparation of trial balance.

Solution:

Here are some points which explain the purpose of preparation of trial balance:

1. Instituting the arithmetical accuracy: When the sum of debit balance accounts equals to the sum of credit balance accounts, it is presumed that posting from the journal to the particular accounts is arithmetically correct.

2. Summarising the ledger accounts: It acts as a consolidated statement, providing a complete list of all the accounts. In this way, a Trial Balance provides a summarised version of each account.

3. Preparation of final accounts− The Trial Balance acts as a summarised version of each account, so different accounts can be directly transferred to Balance Sheet, Trading, and Profit and Loss Account without actually referring to different ledgers.

4. Identifying and rectifying errors: If the Trial Balance is not in agreement, the indications are of the occurrence of an arithmetical error, which can be easily determined. Trial balance is only restricted to determine arithmetical errors.

2. Explain errors of principle and give two examples with measures to rectify them.

Solution:

Errors of Principle refer to those errors that are committed when recording of transactions in the original book of entry is done against the accounting principle.

These errors are not reflected in the Trial Balance.

These errors are committed when proper distinction is not made between capital expenditure and revenue expenditure, or vice versa or between capital income and revenue income or vice versa.

The following examples will illustrate the process of understanding and rectification of such errors.

Let us consider first example. Wages paid for construction of building are debited to Wages Account.

Wrong entry made is:

Wages A/c  Dr.
   To Cash A/c
(Wages paid in cash)

In this case, Wages paid for the construction of building should be treated as a capital expenditure and accordingly should be debited to the building account.

However, the Wages Account is wrongly debited.

Thus, the correct entry that should have been made is:

Building A/c  Dr.
   To Cash A/c
(Wages paid for construction of building)

In order to rectify this error, the rectifying entry should be:

Building A/c  Dr.
   To Wages A/c
(Wages paid for construction of building was debited to Wages Account, now rectified)

The second example of errors of principle is the sale of old machinery recorded as sales.

Wrong entry made:

Cash A/c  Dr.
   To Sales A/c
(Sales of old machinery, recorded as sales)

In this case, the sale of old machinery should not be recorded as sales; in fact the Machinery Account should be credited.

Thus, the correct entry that should have been made is:

Cash A/c  Dr.
   To Machinery A/c
(Old machinery, recorded as sales)

In order to rectify this error, Sales Account will be debited, as it is wrongly credited and machinery will be credited, as it will not be recorded in the books.

Thus, the rectifying entry will be:

Sales A/c   Dr.
   To Machinery A/c
(Sale of old machinery recorded as sales, now rectified)

3. Explain the errors of commission and give two examples with measures to rectify them.

Solution:

Errors of commission are the mistakes which occur due to the negligence of bookkeeper, clerks by recording a transaction with wrong amounts, wrong balancing, wrong posting and/or wrong carrying forwarded of an item of an account.

The following example will ensure the process of understanding and rectification of following errors.

1) Let us consider the first example.

Sales made to Mr. X of s. 10,000 recorded a 1,000 from invoice.

In this case, Mr. X's account has been debited with Rs.1,000 instead of Rs.10,000; So the error of commission, it should be further debited with Rs. 9000.

This will be rectified by passing the following entry:

Mr. X's A/c  Dr.	9,000
To Sales A/c		9,000
(Goods sold to Mr. X of Rs. 10,000 and Wrongly posted as Rs. 1,000, Now rectified)

2) Purchase book was undercast by Rs. 10,000.

This error can be rectified in any of the following two ways:

a. If an error is located before preparing trial balance, then Rs. 10,000 should be recorded in the debit side of Purchase Account.

b. If an error is located after preparing Trial Balance, then the following entry needed to be recorded.

Purchase A/c  Dr.	10,000
To Suspense A/c		10,000

4. What are the different types of errors that are usually committed in recording business transaction?

Solution:

According to the nature of errors committed, errors are classified into the following four categories:

1) Errors of Commission: The errors that are committed because of wrong posting of transactions, wrong balancing of accounts, wrong casting of subsidiary books, wrong totaling or wrong recording of amount in the books are all error of commission.

These errors affect the agreement of the trial balance.

2) Errors of Omission: These errors are of two types and are committed when a transaction is partially or completely omitted to be recorded in the books.

(i) Error of complete omission – When a transaction is completely omitted to be recorded in the books of accounts or to be posted in the respective ledgers, it is an error of complete omission.

Such errors do not affect the agreement of the trial balance.

(ii) Error of partial omission – When a transaction is partially omitted while recording in the books or amounts or partially omitted from posting in the ledger, it is an error of partial omission.

Such errors affect the agreement of the trial balance.

3) Errors of Principle: Accounting transactions are to be recorded following certain principles.

If any of the principle of accounting entries are violated or ignored and the error occurring due to such violation is called error of principle.

4) Compensating errors: When two or more errors are committed in such a way that the net effect of these errors on the debits and credits of accounts is nil, such errors are called compensating errors.

Answer 3

5. As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of Rs. 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pen-drive for Rs 3,500 was posted from the journal to the ledger with a Rs. 3,500 debit to Office Equipment and another Rs. 3,500 debit to creditor’s accounts. Answer each of the following questions and present the amount of any misstatement:

(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?

(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?

(c) Is the debit column total of the trial balance overstated, understated, or correctly stated?

(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?

(e) If the debit column total of the trial balance is Rs. 2, 40,000 before correcting the error, what is the total of credit column?

Solution:

According to the given information, the trial balance does not agree. Pen-drive falls under stationery and is wrongly debited to office equipment account, instead of stationery account and also supplier account is debited instead of crediting. Due to these mistakes, the following errors are committed:

1. The balance of office equipment is overstated by Rs 3,500.
2. The balance of creditor’s account is understated by Rs 7,000.
3. The total of the debit column of the trial balance is correctly stated.
4. The total of the credit column of the trial balance is understated by Rs 7,000.
5. If the total of the debit column of the trial balance is Rs 2,40,000, then before rectifying error, total of the credit column of the trial balance is Rs 2,33,000 (i.e., Rs 2,40,000 − Rs 7,000).

Numerical Questions

1. Rectify the following errors:

(i) Credit sales to Mohan Rs 7,000 were not recorded.

(ii) Credit purchases from Rohan Rs 9,000 were not recorded.

(iii) Goods returned to Rakesh Rs 4,000 were not recorded.

(iv) Goods returned from Mahesh Rs 1,000 were not recorded. 

Solution:

2. Rectify the following errors:

(i) Credit sales to Mohan Rs 7,000 were recorded as Rs 700.

(ii) Credit purchases from Rohan Rs 9,000 were recorded as Rs 900.

(iii) Goods returned to Rakesh Rs 4,000 were recorded as Rs 400.

(iv) Goods returned from Mahesh Rs 1,000 were recorded as Rs 100.

Solution:

3. Rectify the following errors:

(i) Credit sales to Mohan Rs 7,000 were recorded as Rs 7,200.

(ii) Credit purchases from Rohan Rs 9,000 were recorded as Rs 9,900.

(iii) Goods returned to Rakesh Rs 4,000 were recorded as Rs 4,040.

(iv) Goods returned from Mahesh Rs 1,000 were recorded as Rs 1,600.

Solution:

4. Rectify the following errors:

(a) Salary paid Rs. 5,000 was debited to employee’s personal account.

(b) Rent Paid Rs. 4,000 was posted to landlord’s personal account.

(c) Goods withdrawn by proprietor for personal use Rs. 1,000 were debited to sundry expenses account.

(d) Cash received from Kohli Rs. 2,000 was posted to Kapur’s account.

(e) Cash paid to Babu Rs. 1,500 was posted to Sabu’s account.

Solution:

5. Rectify the following errors:

(a) Credit Sales to Mohan Rs 7,000 were recorded in purchases book.

(b) Credit Purchases from Rohan Rs 900 were recorded in sales book.

(c) Goods returned to Rakesh Rs 4,000 were recorded in the sales return book.

(d) Goods returned from Mahesh Rs 1,000 were recorded in purchases return book.

(e) Goods returned from Nahesh Rs 2,000 were recorded in purchases book.

Solution:

Answer 4

6. Rectify the following errors:

(a) Sales book overcast by Rs 700.

(b) Purchases book overcast by Rs 500.

(c) Sales return book overcast by Rs 300.

(d) Purchase return book overcast by Rs 200.

Solution:

7. Rectify the following errors:

(a) Sales book undercast by Rs 300.

(b) Purchases book undercast by Rs 400.

(c) Return Inwards book undercast by Rs 200.

(d) Return outwards book undercast by Rs 100.

Solution:

8. Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

(a) Credit sales to Mohan Rs 7,000 were not posted.

(b) Credit purchases from Rohan Rs 9,000 were not posted.

(c) Goods returned to Rakesh Rs 4,000 were not posted.

(d) Goods returned from Mahesh Rs 1,000 were not posted.

(e) Cash paid to Ganesh Rs 3,000 was not posted.

(f) Cash sales Rs 2,000 were not posted.

Solution:

Note:

In order to match the balance of suspense account, it has been assumed that all errors given in the question are errors of partial omission.

9. Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

(a) Credit sales to Mohan Rs 7,000 were posted as Rs 9,000.

(b) Credit purchases from Rohan Rs 9,000 were posted as Rs 6,000.

(c) Goods returned to Rakesh Rs 4,000 were posted as Rs 5,000.

(d) Goods returned from Mahesh Rs 1,000 were posted as Rs 3,000.

(e) Cash sales Rs 2,000 were posted as Rs 200.

Solution:

Note:

In order to match answer with that of the answer given in the book it has been assumed that all the errors mentioned in this question are errors of partial omission.

10. Rectify the following errors:

(a) Credit sales to Mohan Rs 7,000 were posted to Karan.

(b) Credit purchases from Rohan Rs 9,000 were posted to Gobind.

(c) Goods returned to Rakesh Rs 4,000 were posted to Naresh.

(d) Goods returned from Mahesh Rs 1,000 were posted to Manish.

(e) Cash sales Rs 2,000 were posted to commission account.

Solution:

11. Rectify the following errors assuming that a suspense account was opened.

Ascertain the difference in trial balance.

(a) Credit sales to Mohan Rs 7,000 were posted to the credit of his account.

(b) Credit purchases from Rohan Rs 9,000 were posted to the debit of his account as Rs 6,000.

(c) Goods returned to Rakesh Rs 4,000 were posted to the credit of his account.

(d) Goods returned from Mahesh Rs 1,000 were posted to the debit of his account as Rs 2,000.

(e) Cash sales Rs 2,000 were posted to the debit of sales account as Rs 5,000.

Solution:

12. Rectify the following errors assuming that a suspense account was opened.

Ascertain the difference in trial balance.

(a) Credit sales to Mohan Rs 7,000 were posted to Karan as Rs 5,000.

(b) Credit purchases from Rohan Rs 9,000 were posted to the debit of Gobind as Rs 10,000.

(c) Goods returned to Rakesh Rs 4,000 were posted to the credit of Naresh as Rs 3,000.

(d) Goods returned from Mahesh Rs 1,000 were posted to the debit of Manish as Rs 2,000.

(e) Cash sales Rs 2,000 were posted to commission account as Rs 200.

Solution:

13. Rectify the following errors assuming that suspense account was opened.

Ascertain the difference in trial balance.

(a) Credit sales to Mohan Rs 7,000 were recorded in Purchase Book. However, Mohan’s account was correctly debited.

(b) Credit purchases from Rohan Rs 9,000 were recorded in sales book. However, Rohan’s account was correctly credited.

(c) Goods returned to Rakesh Rs 4,000 were recorded in sales return book. However, Rakesh’s account was correctly debited.

(d) Goods returned from Mahesh Rs 1,000 were recorded through purchases return book. However, Mahesh’s account was correctly credited.

(e) Goods returned to Naresh Rs 2,000 were recorded through purchases book. However, Naresh’s account was correctly debited.

Solution:

14. Rectify the following errors:

(a) Furniture purchased for Rs 10,000 wrongly debited to purchases account.

(b) Machinery purchased on credit from Raman for Rs 20,000 was recorded through purchases book.

(c) Repairs on machinery Rs 1,400 debited to machinery account.

(d) Repairs on overhauling of secondhand machinery purchased Rs 2,000 was debited to Repairs account.

(e) Sale of old machinery at book value of Rs 3,000 was credited to sales account.

Solution:

Answer 5

15. Rectify the following errors assuming that suspension account was opened.

Ascertain the difference in trial balance.

(a) Furniture purchased for Rs 10,000 wrongly debited to purchase account as Rs 4,000.

(b) Machinery purchased on credit from Raman for Rs 20,000 recorded through Purchases Book as Rs 6,000.

(c) Repairs on machinery Rs 1,400 debited to Machinery account as Rs 2,400.

(d) Repairs on overhauling of second hand machinery purchased Rs 2,000 was debited to Repairs account as Rs 200.

(e) Sale of old machinery at book value Rs 3,000 was credited to sales account as Rs 5,000.

Solution:

16. Rectify the following errors:

(a) Depreciation provided on machinery Rs 4,000 was not posted.

(b) Bad debts written off Rs 5,000 were not posted.

(c) Discount allowed to a debtor Rs 100 on receiving cash from him was not posted.

(d) Discount allowed to a debtor Rs 100 on receiving cash from him was not posted to discount account.

(e) Bill receivable for Rs 2,000 received from a debtor was not posted.

Solution:

17. Rectify the following errors:

(a) Depreciation provided on machinery Rs 4,000 was posted as Rs 400.

(b) Bad debts written off Rs 5,000 were posted as Rs 6,000.

(c) Discount allowed to a debtor Rs 100 on receiving cash from him was posted as Rs 60.

(d) Goods withdrawn by proprietor for personal use Rs 800 were posted as Rs 300.

(e) Bill receivable for Rs 2,000 received from a debtor was posted as Rs 3,000.

Solution:

18. Rectify the following errors assuming that suspense account was opened.

Ascertain the difference in trial balance.

(a) Depreciation provided on machinery Rs 4,000 was not posted to Depreciation account.

(b) Bad debts written-off Rs 5,000 were not posted to Debtors account.

(c) Discount allowed to a debtor Rs 100 on receiving cash from him was not posted to discount allowed account.

(d) Goods withdrawn by proprietor for personal use Rs 800 were not posted to Drawings account.

(e) Bill receivable for Rs 2,000 received from a debtor was not posted to Bills receivable account.

Solution:

19. Trial balance of Anuj did not agree. It showed an excess credit of Rs 6,000.

He put the difference to suspense account. He discovered the following errors.

(a) Cash received from Ravish Rs 8,000 posted to his account as Rs 6,000.

(b) Returns inwards book overcast by Rs 1,000.

(c) Total of sales book Rs 10,000 was not posted to Sales account.

(d) Credit purchases from Nanak Rs 7,000 were recorded in sales Book. However, Nanak’s account was correctly credited.

(e) Machinery purchased for Rs 10,000 was posted to purchases account as Rs 5,000. Rectify the errors and prepare suspense account.

Solution:

20. Trial balance of Raju showed an excess debit of Rs 10,000. He put the difference to suspense account and discovered the following errors:

(a) Depreciation written-off the furniture Rs 6,000 was not posted to Furniture account.

(b) Credit sales to Rupam Rs 10,000 were recorded as Rs 7,000.

(c) Purchases book undercast by Rs 2,000.

(d) Cash sales to Rana Rs 5,000 were not posted.

(e) Old Machinery sold for Rs 7,000 was credited to sales account.

(f) Discount received Rs 800 from Kanan on playing cash to him was not posted. Rectify the errors and prepare suspense account.

Solution:

Note:

As per the solution, suspense account shows the credit balance of ₹ 6,000.

However, in the book the answer is credit balance of ₹ 1,000.

So, in order to match the answer with the book item (d) is taken as, ‘Cash Sales to Rana ₹ 5,000 were not posted to the sales account.’

Thus, the rectifying entry of this error will be:

Suspense A/c  Dr.	5,000
To Sales A/c		5,000

Answer 6

21. Trial balance of Madan did not agree and he put the difference to suspense account. He discovered the following errors:

(a) Sales return book overcast by Rs 800.

(b) Purchases return to Sahu Rs 2,000 were not posted.

(c) Goods purchased on credit from Narula Rs 4,000 though taken into stock, but no entry was passed in the books.

(d) Installation charges on new machinery purchased Rs 500 were debited to sundry expenses account as Rs 50.

(e) Rent paid for residential accommodation of madam (the proprietor) Rs 1,400 was debited to rent account as Rs 1,000.

Rectify the errors and prepare suspense account to ascertain the difference in trial balance.

Solution:

Note:

As per the solution Suspense Account shows a credit balance of ₹ 50.

However, as per the answer given in the book, it is a credit balance of ₹ 2050.

In order to match answer with the book item (b) is taken as, ‘Purchases return to Sahu ₹ 2,000 were not posted to Sahu’s Account.’

Thus, the rectifying entry for this error will be as:

Sahu's A/c  Dr.	2,000
To Suspense A/c		2,000

22. Trial balance of Kohli did not agree and showed an excess debit of Rs 16,300. He put the difference to a suspense account and discovered the following errors:

(a) Cash received from Rajat Rs 5,000 was posted to the debit of Kamal as Rs 6,000.

(b) Salaries paid to an employee Rs 2,000 were debited to his personal account as Rs 1,200.

(c) Goods withdrawn by proprietor for personal use Rs 1,000 were credited to sales account as Rs 1,600.

(d) Depreciation provided on machinery Rs 3,000 was posted to Machinery account as Rs 300.

(e) Sale of old car for Rs 10,000 was credited to sales account as Rs 6,000. Rectify the errors and prepare suspense account.

Solution:

23. Give journal entries to rectify the following errors assuming that suspense account had been opened.

(a) Goods distributed as free sample Rs 5,000 were not recorded in the books.

(b) Goods withdrawn for personal use by the proprietor Rs 2,000 were not recorded in the books.

(c) Bill receivable received from a debtor Rs 6,000 was not posted to his account.

(d) Total of Returns inwards book Rs 1,200 was posted to Returns outwards account.

(e) Discount allowed to Reema Rs 700 on receiving cash from her was recorded in the books as Rs 70.

Solution:

24. Trial balance of Khatau did not agree. He put the difference to suspense account and discovered the following errors:

(a) Credit sales to Manas Rs 16,000 were recorded in the purchases book as Rs 10,000 and posted to the debit of Manas as Rs 1,000.

(b) Furniture purchased from Noor Rs 6,000 was recorded through purchases book as Rs 5,000 and posted to the debit of Noor Rs 2,000.

(c) Goods returned to Rai Rs 3,000 recorded through the Sales book as Rs 1,000.

(d) Old machinery sold for Rs 2,000 to Maneesh recorded through sales book as Rs 1,800 and posted to the credit of Manish as Rs 1,200.

(e) Total of Returns inwards book Rs 2,800 posted to Purchase account.

Rectify the above errors and prepare suspense account to ascertain the difference in trial balance.

Solution:

25. Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors:

(a) In the sales book for the month of January total of page 2 was carried forward to page 3 as Rs 1,000 instead of Rs 1,200 and total of page 6 was carried forward to page 7 as Rs 5,600 instead of Rs 5,000.

(b) Wages paid for installation of machinery Rs 500 was posted to wages account as Rs 50.

(c) Machinery purchased from R & Co. for Rs 10,000 on credit was entered in Purchase Book as Rs 6,000 and posted there from to R & Co. as Rs 1,000.

(d) Credit sales to Mohan Rs 5,000 were recorded in Purchases Book.

(e) Goods returned to Ram Rs 1,000 were recorded in Sales Book.

(f) Credit purchases from S & Co. for Rs 6,000 were recorded in sales book. However, S & Co. was correctly credited.

(g) Credit purchases from M & Co. Rs 6,000 were recorded in Sales Book as Rs 2,000 and posted there from to the credit of M & Co. as Rs 1,000.

(h) Credit sales to Raman Rs 4,000 posted to the credit of Raghvan as Rs 1,000.

(i) Bill receivable for Rs 1,600 from Noor was dishonoured and posted to debit of Allowances account.

(j) Cash paid to Mani Rs 5,000 against our acceptance was debited to Manu.

(k) Old furniture sold for Rs 3,000 was posted to Sales account as Rs 1,000.

(l) Depreciation provided on furniture Rs 800 was not posted.

(m) Material Rs 10,000 and wages Rs 3,000 were used for construction of building. No adjustment was made in the books.

Rectify the errors and prepare suspense to ascertain the difference in trial balance.

Solution:

Note:

In item (m), it has been assumed that the materials used in the construction of building are part of stock in trade.