Wages paid for installation of machinery Rs $2, 750$ had been debited to wages account as Rs $5, 250$ . If this error located after preparation of final account then which of the following rectification entry is correct?

Machinery A/c Dr.

2, 500

Suspense A/c Dr.

2, 750

To Profit & Loss Adj. A/c

5, 250

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Profit & Loss Adj. A/c Dr.

5, 250

To Machinery A/c

2, 500

To Suspense A/c

2, 750

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Profit & Loss Adj. A/c Dr.

5, 250

To Machinery A/c

2, 750

To Suspense A/c

2, 500

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Machinery A/c Dr.

2, 750

Suspense A/c Dr.

2, 500

To Profit & Loss Adj. A/c

5, 250

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Solution

The correct option is D Machinery A/c Dr. $2, 750$
Suspense A/c Dr. $2, 500$
To Profit & Loss Adj. A/c $5, 250$
The mentioned transaction has two error. Since the error is located after the preparation of final account, rectification need to be passed through profit & loss adjustment account.

1) Recording of capital expenditure as revenue expenditure. Its an error of principle.
2) Amount of Rs. 2750 is recorded as Rs.5250. Its an error of commission.

To rectify the error, following rectification entry need to be passed:

Machinery A/c Dr. 2750 (with the actual amount)
Suspense A/c Dr. 2500 (due to wrong amount posting)
To P&L Adjustment A/c 5750 (to affect the P&L witht the total amount)

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Similar questions

Trial balance of Radhika did not agree. Radhika put the difference to suspense account. subsequently she located the following errors.

1) Furniture purchased for Rs 6,000 was posted to purchases account as Rs 600.
2) Repairs to Machinerry Rs 500 were debited to Machinery account.
3) Wages paid for installation of Machinery Rs 750 was posted to wages account.
4) Purchased material Rs 8,000 and wages Rs 2,000 were used for construction of building not recorded in the books.
5) Total of sales returns book Rs 2,000 was not posted to the ledger.
6) Old Furniture sold to Dinesh at its book value of Rs 2,500 was recorded through sales book.

Q. Select the most appropriate alternative from the alternatives given below and rewrite the statement.

Wages paid for installation of machinery should be debited to ______.
a) Wages A/c
b) Machinery A/c
c) Cash A/c
d) Installation A/c

Rectify the following errors:

(i) Repairs made on Building for Rs 1,00,000 were debited to Building a/c.
(ii) Rent paid Rs 12,000 to Landlord was debited to Landlord a/c.
(iii) Wages paid for installation of Machinery of Rs 7,000 was debited to Wages a/c.
(iv) Salary paid to Accountant (Mr. Ram) on Rs 15,000 was debited to Ram a/c.
(v) Rs 32,000 paid for purchase of Computer was charged to Office Expenses a/c.
(vi) Amount of Rs 7,500 withdrawn by proprietor for personal use was debited to Miscellaneous Expenses a/c.

Q. Entry for transfer of gross loss is -
Trading A/c Dr.
To Profit and Loss A/c

Q. Entry for transfer of Gross profit is :
Profit and Loss A/c Dr.
To Trading A/c

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Wages paid for installation of machinery Rs 2,750 had been debited to wages account as Rs5,250. If this error located after preparation of final account then which of the following rectification entry is correct?

Wages paid for installation of machinery Rs $2, 750$ had been debited to wages account as Rs $5, 250$ . If this error located after preparation of final account then which of the following rectification entry is correct?