Accounting: Furniture and Rectification of Errors After Preparation of Trial Balance (For CBSE, ICSE, IAS, NET, NRA 2022)

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Furniture a/C

Furniture A/c

Dr. Cr.

Table Supporting: Accounting: Furniture and Rectification of Errors After Preparation of Trial Balance
DateParticularsJ. F.Amount (₹)DateParticularJ. FAmount

(₹)

2006

Jan 15

Amount transferred to Purchase A/c5000

Purchases A/c

Dr. Cr.

Table Supporting: Accounting: Furniture and Rectification of Errors After Preparation of Trial Balance
DateParticularsJ. F.Amount (₹)DateParticularJ. FAmount

(₹)

2006

Jan 15

Amount transferred to Furniture A/c5000

Rectification of Errors After Preparation of Trial Balance

If errors are identified early before preparing Trial Balance, we can rectify them by instant correction or by making corrections in respective ledger accounts. If the Trial Balance is not balanced and we are unable to find out the reason, then we need to rectify the error in order to close the accounts for the current period. For this correction we make a Suspense A/c. The unbalanced amount will be either debited or credited with suspense account based on the situation. The Suspense A/c will disappear after identification of original error.

For the correction of Errors, mentioned above, we make journal entries.

Rectification through Journal Entries

Rectification of Two-sided errors through Journal Entries:

Ex: Purchase of furniture of ₹ 5,000 was entered in the Purchases Book.

Solution:

Table Supporting: Rectification_through_Journal_Entries
DateParticularsL. F.Dr. Amount (₹)Cr. Amount (₹)
2006

Jan 15

Furniture A/c Dr.

To Purchases A/c

(Furniture purchased on credit is wrongly entered in Purchases A/c is now corrected)

50005000

Rectification of Errors through Suspense a/C and Their Journal Entries

Ex: Gopal A/c was debited short by ₹ 100. Rectify the error through Suspense A/c and make journal entries for the same.

Table Supporting: Rectification_of_Errors_through_Suspense_Ac_and_their_journal_Entries
DateParticularsL. F.Dr. Amount (₹)Cr. Amount (₹)
Gopal A/c Dr.

To Suspense A/c

(Gopal՚s A/c debited short is now corrected)

100100

Example: Rectify the following accounting errors through Suspense Account by making journal entries:

  • Purchase of goods from Mohit for Rs2500 was entered in the Sales Book, however Mohit՚s Account was correctly credited.
  • Cash received from Anil a debtor Rs3200 was correctly entered in the Cash Book but was omitted to be posted to his account.
  • Sales Book was overcast by Rs1500.
  • Cash of Rs4000 paid to Hanif was credited to Rafique A/c as Rs1400.
  • The total of Purchase Returns Book of Rs3150 was carried forward as Rs1530.
  • Namita was paid cash Rs6500 but Sumita was debited by Rs6000.

Solution:

Table Supporting: Rectification_of_Errors_through_Suspense_Ac_and_their_journal_Entries
ParticularsL. FAmount (₹)
Dr.Cr.
  1. Purchases A/c Dr.
Sales A/c Dr.

To Suspense A/c

(Purchase of goods was entered in the sale book is now corrected)

2500

2500

5000
  1. Suspense A/c Dr.
To Anil A/c

(Anil՚s Account omitted to be credited now corrected)

32003200
  1. Sales A/c Dr.
To Suspense A/c

(Sales book overcast is now corrected)

15001500
  1. Hanif A/c Dr.
Rafique A/c Dr.

To Suspense A/c

(Cash paid to Hanif was wrongly credited to Rafique the error is now rectified)

4000

1400

5400
  1. Suspense A/c Dr.
To Purchase Returns A/c

(Purchases Returns Book is under casted is now rectified)

16201620
  1. Namita A/c Dr.
To Susmita A/c

To Suspense A/c

(Cash paid to Namita 6,500 was debited to Susmita by 6000 is now rectified)

65006,000

500

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