Book-Keeping and Accountancy Class 11- Chapter - 8 -Rectification Of Errors

Q. 1. Answer in one sentence.

1) What is meant by Rectification of Errors?

Ans. Mom the book of accounts, when errors are identified (to confirm accuracy in the books of accounts) and entries are passed to rectify that errors, it is known as rectification of errors.

2) What is meant by Error of Principle?

Ans. In the books of accounts when transactions are recorded without following the accounting principles and/or rules, is known as error of principle.

3) What is meant by Error of Partial Omission?

Ans. When a transaction to be recorded in the books of account is partially omitted and due to which trial balance does not get tallied, it is known as error of partial omission:

4) What is meant by Error of Complete Omission?

Ans. When a transaction to be recorded in the books of accounts is completely omitted and due to which agreement of trial balance does not affect, it is known as error of complete omission.

5) What are Compensating Errors?

Ans. When two or more errors, identified from books of accounts are in such a way that the net effect of these errors, on the debit and on the credit sides of accounts is nil, such errors are known as compensating errors.

Q. 2. Give one word/term or phrase for each of the following statements.

Statement	Ans.
(1) Errors which affect the agreement of Trial Balance.	One sided errors
(2) Taking the total more while closing books of accounts.	Overcasting.
(3) Error which arises when a transaction is partially or completely omitted to be recorded in the books of accounts.	Error of omissions
(4) Transactions recorded due to violating of the accounting principles.	Error of principle
(5) Accounts to which difference in Trial Balance is transferred.	Suspense account
(6) Error in which the effect of one mistake is nullified by another mistake.	Compensating Error
(7) Error which are not disclosed by the Trial Balance.	Two sided errors
(8) Errors of incorrect entries or wrong posting.	Error of commission

Q. 3. Select the most appropriate alternative from the alternatives given below and write the sentence:

1) Rectification entries are passed in -----------------.

a) Journal Proper b) Ledger c) Balance sheet d) Cash Book

2) The type of error for which journal entry is always required for rectification ---------------.

a) over casting b) one sided error c) under casting d) two sided error

3) Errors occurred due to wrong posting are called as errors of -------------.

a) principle b) commission c) compensating d) omission

4) If transaction is totally omitted from the Books, it is called ------------------

a) Error of recording b) Error of omission c) Error of principle d) Error of commission

5) Suspense Account is opened when ____ does not tally

a) Balance sheet b) Trading account c) Profit and Loss d) Trial Balance

Q.4. State whether the following statements are True or False with reasons.

1) Trial balance is prepared from the balance of Ledger Account.

Ans. This statement is True.

Basic aim of preparing a trial balance is to check arithmetic accuracy of transactions recorded in a journal, posting them into the ledger and balancing of the ledger accounts.

2) A trial balance can agree in spite of certain errors.

Ans. This statement is True.

Certain errors, like Error of Complete omission, Error of principle or Compensating error, due to which a trial balance can agree because there are two sided errors.

3) Rectification entries are passed in cash book.

Ans. This statement is False.

In a special subsidiary book known as journal proper, rectification entries are to be passed.

4) There is no need to open a Suspense Account if the trial balance agrees.

Ans. This statement is True.

When the trial balance agrees, it means debit side total is equal to the credit side total of balances of Ledger accounts. So, we can say that there is no need to open a Suspense Account, if the trial balance agrees.

5) All the errors can be rectified only through Suspense Account.

Ans. This statement is False.

When the debit side total is not equal to the credit side total of balances of ledger accounts, one side errors are identified and its rectification is completed through suspense account. So, we can say that all the errors can’t be rectified only through suspense account.

Q. 5. Do you agree or disagree with the following statements.

1) The unintentional omission or commission of amounts and accounts while recording the transactions are known as an error.

Ans. Agree

2) The errors committed due to wrong recording, wrong posting, wrong totaling, wrong balancing, wrong calculations are known as Arithmetical errors.

Ans. Disagree.

3) When one or more debit errors happen to equal one or more credit errors it is s Compensating error.

Ans. Agree.

4) The agreement of Trial balance is not affected when a transaction is not recorded at all in the original Books.

Ans. Agree.

5) When a transaction is not recorded according to the principles of accounting it is known as Compensating errors.

Ans. Disagree.

Q.6. Complete the following sentence.

1) …………… is assured only when there are no errors in the books of accounts.
2) Transactions recorded in contravention of the accounting principles are known as …………
3) ………… entry depends generally on when the error is detected.
4) Temporary account opened to rectify the entry is known as………………
5) Errors are caused due to …………… recording of transactions.

1) Accuracyis assured only when there are no errors in the books of accounts.

2) Transactions recorded in contravention of the accounting principles are known as Errors of Principle.

3) Rectifying entry depends generally on when the error is dedected.

4) Temporary account opened to rectify the entry is known as Suspense Account.

5) Errors are caused due to wrong recording of transactions.

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PRACTICAL PROBLEMS

1. Rectify the following errors

1) Salary paid to Pravin was wrongly debited to his personal account `6,500/-

2) Cash Purchases ` 12,000/- from Siddhant Traders was debited to Siddhant Trader Account.

3) Paid Rent `5,000 to landlord Shantilal was debited to his personal account.

4) Received interest `700 from Bank was wrongly credited to Bank Account.

5) Advertisement expenses ` 5,000/- paid to Time of India was debited to Time of India.

2. Rectify the Following errors

1) Machinery purchased for ` 9,000/- has been debited to Purchase Account.

2) ` 15,000/- paid to Indus Company for Machinery purchased stand debited to Indus

Company Account.

3) Printer Purchased for `10,000/- was wrongly passed through Purchase Book.

4) ` 800/- paid to Mohan as Legal Charges was debited to his personal account.

5) Cash paid to Ramesh `500/- was debited to Suresh.

3. Rectify the Following errors

1) A credit sales of goods to Sanjay ` 3,000/- has been wrongly passed through the ‘Purchase

Book’.

2) A credit purchase of goods from Sheetal amounting to ` 2,000/- has been wrongly passed

through the ‘Sales Book’.

3) A return of goods worth ` 500/- to Umesh was passed through the ‘Sales Return Book’.

4) A return of goods worth ` 900/- by Ganesh were entered in ‘Purchase Return Book’.

5) Credit Purchases from Neha ` 10,000/- were recorded as ` 11,000/-

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4. Rectify the Following errors

1) Paid Rent ` 2,000/- to Nikhil has been debited to his personal account.

2) Total of the Sales Return Book is wrongly taken more by ` 200/-

3) Goods sold to Dhanraj ` 6,500/- on credit was not posted to his personal account.

4) Old Computer purchased was debited to Repairs account ` 8,000/-

5) Repairs to Furniture of ` 500/- has been debited to Furniture account.

5. Rectify the Following errors

1) Wages paid for construction of Building ` 10,000/- was wrongly debited to Wages Account.

2) Cash received from Patel ` 5,000/- though recorded in Cash Book was not posted to his

personal account in the Ledger.

3) Sold goods worth ` 9,000/- to Rohini has been wrongly debited to Mohini’s Account.

5) Material purchased for construction of Building was debited to Purchase Account `5,000/-

6. There was a difference of ` 1,230/- in a Trial Balance. It was placed on the Debit

side of Suspense A/c. Later on the following errors were discovered. Pass rectifying

entries and prepare Suspense A/c.

1) Sales Book was overcast by ` 1,000/-

2) Goods sold to Aarti for ` 4,400/- has been posted to her account as `4,000/-

3) Purchases Book was overcast by `100/-

4) An amount of ` 500/- received from Ranjeet, has not been posted to his account.

5) Goods sold to Sameer for ` 750/- were recorded in Purchase Book.

6) An amount of ` 500/- has been posted to the credit side of Commission Account instead

of ` 570/-

7. A book-keeper finds that the debit side of the Trial Balance is short of ` 308/- and so

for the time being, he balance of the side by putting the difference to Suspense

Account. The following errors were disclosed.

1) The debit side of purchases account was undercast by `100/-

2) ` 100/- being the monthly total of discount allowed to customer were credited to discount

account in the ledger.

3) An entry for goods sold of ` 102/- to Mihir was posted to his account as ` 120/-

4) ` 26/- appearing in the Cash Book as paid for the purchase of Stationery for office use

have not been posted to Ledger.

5) ` 275/- paid by Mihir were credited to Mithali’s Account.

You are required to make the necessary Journal Entries and the Suspense Account.

8. Trial Balance of Anurag did not agree. It showed an excess credit of ` 6,000/-. He

put the difference to Suspense Account. He discovered the following errors.

1) Cash received from Ramakant ` 8,000/- posted to his account as `6,000/-

2) Credit purchases from Naman ` 7,000/- were recorded in Sales Book. However, Naman’s

Account was correctly credited.

3) Return Inwards Book overcast by ` 1,000/-

4) Total of Sales Book ` 10,000/- was not posted to Sales Account.

5) Machinery purchased for ` 10,000/- was posted to Purchases Account as ` 5,000/-.

Rectify the errors and prepare Suspense Account.

9. There was an error in the Trial Balance of Mr. Yashwant on 31st March 2019, and

the difference in Books was carried to a Suspense Account. On going through the

Books you found that.

1) ` 1,000/- being purchases return were posted to the debit of Purchase Account.

2) ` 4,000/- paid to Badrinath was debited to Kedarnath’s Account.

3) ` 5,400/- received from Kishor was posted to the debit of his account.

4) Discount received ` 2,000/- was posted to the debit of Discount Allowed Account.

5) ` 2,740/- paid to Repairs to Motor Cycle was debited to Motor Cycle Account ` 1,740/-

Give Journal Entries to rectify the above errors and ascertain the amount transferred to Suspense

Account on 31st March, 2019 by showing the Suspense Account, assuming that the Suspense

Account is balanced after the above corrections.

10. Rectify the following errors.

1) Goods purchased from Kishor ` 700/- was passed through Sales Book.

2) An item of ` 120/- in respect of purchase returns, has been wrongly entered in the Purchase

Book.

3) Amount payable to Subhash for repairs done to Printer ` 180/- and new Printer supplied

for ` 1,920/- , were entered in the Purchase Book as ` 2,000/-

4) Returned goods to Nitin ` 1,500/- was passed through Returns Inward Book.

5) An item of `450/- relating to Prepaid Rent account was omitted to be brought forward.