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 creditors 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.
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 creditors 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.
According
to the given information, trial balance does not agree.
Pen-drive is wrongly debited to office equipment account, instead of
stationery account and supplier account is debited instead of
crediting. Due to these mistakes, the following errors are committed:
The
balance of office equipment is overstated by Rs 3,500.
The
balance of creditors account is understated by Rs 7,000.
The
total of the debit column of the trial balance is correctly stated.
The
total of the credit column of the trial balance is understated by Rs
7,000.
If
the total of the debit column of the trial balance is Rs 2,40,000
before rectifying error, the total of the credit column of the trial
balance is Rs 2,33,000 (i.e., Rs 2,40,000 − Rs 7,000).
According to the given information, trial balance does not agree. Pen-drive is wrongly debited to office equipment account, instead of stationery account and supplier account is debited instead of crediting. Due to these mistakes, the following errors are committed:
The balance of office equipment is overstated by Rs 3,500.
The balance of creditors account is understated by Rs 7,000.
The total of the debit column of the trial balance is correctly stated.
The total of the credit column of the trial balance is understated by Rs 7,000.
If the total of the debit column of the trial balance is Rs 2,40,000 before rectifying error, the total of the credit column of the trial balance is Rs 2,33,000 (i.e., Rs 2,40,000 − Rs 7,000).
