The accountant of a firm finds that the Trial Balance as on 31st December, 2017 is out by as excess debit of ₹ 283. He placed the amount in the Suspense Account. In the first week of January, 2018, he discovered the following errors. Pass the Journal entries necessary to rectify these errors and show the Suspense Account as it would appear at the end of the week. Have you any comment to make?
(i) Cash paid to Amar Nath, ₹ 75, was posted to the credit of Amar Singh's Account as ₹ 57.
(ii) Discount allowed by Brijesh of ₹ 5 was not entered in the Cash Book but Brijesh stands debited correctly.
(iii) No entry was made of goods worth ₹ 40 taken away by proprietor for personal use.
(iv) ₹ 500 received from Jhaveri Bros. for interest on loan advanced to them were recorded in the Cash Book. But the entry was not posted in the Ledger.
(v) The total of Returns Outward Book was short by ₹ 100.
(i) Cash paid to Amar Nath, ₹ 75, was posted to the credit of Amar Singh's Account as ₹ 57.
(ii) Discount allowed by Brijesh of ₹ 5 was not entered in the Cash Book but Brijesh stands debited correctly.
(iii) No entry was made of goods worth ₹ 40 taken away by proprietor for personal use.
(iv) ₹ 500 received from Jhaveri Bros. for interest on loan advanced to them were recorded in the Cash Book. But the entry was not posted in the Ledger.
(v) The total of Returns Outward Book was short by ₹ 100.
Journal
Date
Particulars
L.F.
Debit
Amount
Rs
Credit
Amount
Rs
(i)
Amar Nath
Dr.
75
Amar Singh
Dr.
57
To Suspense A/c
132
(Cash paid to Amar Nath Rs 75 was wrongly Credited to Amar Singh as Rs 57, now rectified)
(ii)
Suspense A/c
Dr.
5
To Discount Received A/c
5
(Discount Received by Brijesh was omitted to be recorded in Discount column but was recorded in
Brijesh’s Account, now rectified)
(iii)
Drawings A/c
Dr.
40
To Purchases A/c
40
(Goods Drawn by proprietor was not recorded, now recorded)
(iv)
Suspense A/c
Dr.
500
To Interest on Advance A/c
500
(Interest on Advances received from Jhaveri Bros was not posted into Ledger, now rectified)
(v)
Suspense A/c
Dr.
100
To Return Outwards A/c
100
(Return Outwards Book undercasted, now rectified)
Suspense Account
Dr.
Cr.
Date
Particulars
Amount Rs
Date
Particulars
Amount Rs
(ii)
Discount Received
5
Balanced b/d
283
(iv)
Interest on Advances
500
(i)
Amar Nath
75
(v)
Return Outwards
100
(i)
Amar Singh
57
Balance c/d
190
605
605
There is some error in the book of account after rectifying the traced error, Suspense Account is not closed.
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
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(i) |
Amar Nath |
Dr. |
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75 |
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Amar Singh |
Dr. |
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57 |
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To Suspense A/c |
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132 |
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(Cash paid to Amar Nath Rs 75 was wrongly Credited to Amar Singh as Rs 57, now rectified) |
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(ii) |
Suspense A/c |
Dr. |
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5 |
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To Discount Received A/c |
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5 |
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(Discount Received by Brijesh was omitted to be recorded in Discount column but was recorded in |
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Brijesh’s Account, now rectified) |
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(iii) |
Drawings A/c |
Dr. |
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40 |
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To Purchases A/c |
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40 |
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(Goods Drawn by proprietor was not recorded, now recorded) |
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(iv) |
Suspense A/c |
Dr. |
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500 |
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To Interest on Advance A/c |
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500 |
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(Interest on Advances received from Jhaveri Bros was not posted into Ledger, now rectified) |
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(v) |
Suspense A/c |
Dr. |
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100 |
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To Return Outwards A/c |
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100 |
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(Return Outwards Book undercasted, now rectified) |
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Suspense Account |
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Dr. |
Cr. |
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Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
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(ii) |
Discount Received |
5 |
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Balanced b/d |
283 |
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(iv) |
Interest on Advances |
500 |
(i) |
Amar Nath |
75 |
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(v) |
Return Outwards |
100 |
(i) |
Amar Singh |
57 |
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Balance c/d |
190 |
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605 |
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605 |
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There is some error in the book of account after rectifying the traced error, Suspense Account is not closed.
