# NCERT Solutions for Class 11 Accountancy Chapter 6 Trial Balance and Rectification of Errors

Accountancy is a very important subject for Class 11 commerce students. In Class 11, students are introduced to the subject for the very first time and the basics learnt here will stay with them throughout their higher education as well. This makes it very important for students to give proper attention to this subject.

With NCERT Solutions for Class 11 Accountancy Chapter 6 by Extramarks, students get an invaluable resource to help them with their preparation. It includes a compilation of detailed answers to the questions given at the end of Chapter 6, Trial Balance and Rectification of Errors, which students can refer to for their preparations and for help with their assignments.

## Class 11 Accountancy NCERT Solutions Chapter 6 Trial Balance and Rectification of Errors

### NCERT Accountancy Class 11 Solutions

Class 11 Accountancy Solutions by Extramarks are detailed answers to the questions given at the end of the NCERT textbook chapters. These solutions are prepared by subject matter experts that give special attention to accuracy and provide in-depth explanations for the students’ reference. The NCERT Solutions for Accountancy subject can be used as a quick guide for preparing oneself for the upcoming Class 11 examinations.

#### What is a Trial Balance?

The trial balance is a bookkeeping spreadsheet that carries balances of all the general ledger accounts assembled into equal debit and credit account columns. Generally, a company prepares a trial balance periodically, at the end of every reporting session. It helps the company ensure that its bookkeeping system is mathematically accurate. The trial balance is considered to be balanced only when the total debits equal the total credits, and at the same time, the ledgers must be free of mathematical errors.

#### What Are the Two Types of Errors of Principles?

The two types of errors of principles are given below:

• Wrong Casting: The total of the purchase book has an increased amount of Rs. 7,000 in excess. As soon as this sum of money is posted on the debit column of the purchase account, there will be an excess of Rs. 7,000 on the debit side. Hence, the trial balance will detect a difference, refusing to agree.
• Wrong Posting of Amount: Suppose some goods have been purchased for Rs. 700 from DCE. While posting this on the credit column, this amount was mistaken for Rs. 70 the trial balance will show a difference and disagreement. The amount should be correctly entered to avoid interruptions.

#### What Are the Two Errors of Commission?

Given below are the two errors of commission:

• Posting the Wrong Amount: Let us say that you have bought goods from ABC for Rs. 8,000, but when making the entry of this amount on ABC’S credit column, an amount of Rs. 800 has been mistakenly entered instead of Rs. 8000. In this case, the trial balance will show a difference and will not agree.
• Posting on the wrong side: Posting on the wrong side error occurs when, for example, the goods purchased from ABC have been recorded on the debit column instead of the credit column. The trial balance will again show a difference and will refuse to agree.

#### What Are the Methods of Preparing a Trial Balance?

The methods of preparing a trial balance have been given below:

1. Totals Method: Under the totals method, the total of both the debit and credit columns should be equal because accounting, as we know, is all about the double-entry systems.
2. Balances Method: The closing balances are in focus under the balance method. In this, the closing balances of the accounts are calculated, and then proceedings are carried forward.
3. Totals-cum-Balances Method: The totals-cum-balances method uses both the total and balance methods. It has four columns in total, out of which two are used for writing credit details and debit details, and the other two are used for noting down the balances of the accounts.

#### What is a Suspense Account?

The account used to handle doubtful entries is known as a suspense account. It is a temporarily created account and comes into action to avoid delays in preparing financial statements. A suspense account may represent a repository for financial transactions such as cash receipts and journal entries that have been entered with wrong or invalid account numbers. The account  entered may or may not exist, or it might be a deleted one. This type of situation often occurs when the debit side fails to tally with the credit side.

#### Fun Facts

• Did you know that the word “Bookkeeping” is the only English word having three sets of double letters, one after the other?
• Luca Pacioli, the father of accounting, gave Mathematics lessons to Leonardo da Vinci.

Q.1 State the meaning of a trial balance?

Ans.

A trial balance is the list of debit and credit balances, taken out from the ledger. It also includes the balance of cash and bank taken from the cash book.

Q.2 Give two examples of errors of principle?

Ans.

The examples of errors of principle are:

• Amount spent on additions to the buildings should be treated as capital expenditure and must be debited to the asset account. Instead, if this amount is debited to maintenance and repairs account, it has been treated as a revenue expense.
• If a credit purchase of machinery is recorded in purchases book instead of journal proper or rent paid to the landlord is recorded in the cash book as payment to landlord.

Q.3 Give two examples of errors of commission?

Ans.

• Wrong posting of transactions: for example, posting of the sales book in the purchase account instead of the sales account.
• Wrong totaling or wrong balancing of the accounts: for example, purchases book is totaled as 1,000 instead of 10,000.

Q.4 What are the methods of preparing trial balance?

Ans.

The methods of preparing trial balance are

• Totals method.
• Balances method.
• Totals-cum-balances method.

Q.5 What are the steps taken by an accountant to locate the errors in the trial balance?

Ans.

The accountant should take the following steps to detect and locate the errors:

• Recast, the total of debit and credit columns of the trial balance.
• Compare the account head/title and amount appearing in the trial balance, with that of the ledger to detect any difference in amount or omission of an account.
• Compare the trial balance of current year with that of the previous year to check additions and deletions of any accounts and also verify whether there is a large difference in amount, which is neither expected nor explained.

Q.6 What is a suspense account? Is it necessary that is suspense account will balance off after rectification of the errors detected by the accountant? If not. Then what happens to the balance still remaining in suspense account?

Ans.

Suspense account is an account in which the difference in the trial balance is put till such time that errors are located and rectified.

It facilitates the preparation of financial statements even when the trial balance does not tally.

When all the errors are located and rectified the suspense account stands disposed off.

If Suspense account still shows a balance, it will be taken to the Balance Sheet (on the asset side if it shows a debit balance or on the liabilities side if it shows a credit balance.

Q.7 What kinds of errors would cause difference in the trial balance? Also list examples that would not be revealed by a trial balance?

Ans.

Errors which affect the trial balance or one sided errors are:

• When a subsidiary book is under cast (totaled less) or overcast (totaled in excess).
• When the posting to an account is altogether omitted.
• When the posting is made on the wrong side of an account.
• When the posting of a wrong amount is done.

Errors which do not affect the trial balance or two sided errors:

• Omission to pass an entry in the books original records.
• Wrong recording of a transaction in the books of original records.
• Posting to the wrong account.
• Errors of principle.

Q.8 State the limitations of trial balance?

Ans.

Limitations of Trial Balance:

• Error in totaling of the debit and credit balances in the trial balance.
• Error in totaling of subsidiary books.
• Error in showing account balances in wrong column of the trial balance or in the wrong amount.
• Omission in showing an account balance in the trial balance.
• Error in the calculation of a ledger account balance.
• Error in recording a transaction in subsidiary book with wrong name or wrong amount.

Q.9 Describe the purpose for the preparation of trial balance.

Ans.

The trial balance is prepared to fulfill the following objectives:

(a) To ascertain the arithmetical accuracy of the ledger accounts:

• The purpose of preparing a trial balance is to ascertain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced.
• When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct.
• It ensures that all debits and the credits have been properly recorded in the ledger.

(b) To help in locating errors: When a trial balance does not tally, it is assumed that there must be error.

Errors occurred in the accounting process are:

• Totaling of subsidiary books.
• Posting of journal entries in the ledger.
• Calculating account balances.
• Carrying account balances to the trial balance and
• Totaling the trial balance columns.

(c) To help in the preparation of the financial statements. (Profit & Loss account and Balance Sheet):

• Trial balance is considered as the connecting link between accounting records and the preparation of financial statements.
• The availability of a tallied trial balance is the first step in the preparation of financial statements.
• All revenue and expense accounts appearing in the trial balance are transferred to the trading and profit and loss account and all liabilities, capital and assets accounts are transferred to the balance sheet.

Q.10 Explain errors of principle and give two examples with measure to rectify them.

Ans.

Accounting entries are recorded as per the generally accepted accounting principles, if any of these principles are violated or ignored, errors resulting from such violation are known as errors of principle.

An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue.

Examples:

• Wages paid to a worker for making additions to machinery amounting to 5,000 were debited to the wages account.
• Purchase of office furniture worth 1,000 has been debited to the General Expenses Account.

Q.11 Explain the errors of commission and give two examples with measures to rectify them.

Ans.

Errors of Commission refers to those errors which are committed due to wrong posting of transactions, wrong totaling or wrong balancing of the accounts, wrong casting of the subsidiary books or wrong recording of amount in the books of original entry.

Examples:

• Recording purchases of goods for 6,000 as 60,000.
• Cash balance of 100 carried forward as 10,000.

Q.12 What are the different types of errors that are usually committed in recording business transaction?

Ans.

Different types of errors that are usually committed in recording business transactions are:

Errors of Commission:

These are the errors which are committed due to wrong posting of transactions, wrong totaling or wrong balancing of the accounts, wrong casting of the subsidiary books or wrong recording of amount in the books of original entry.

Example:

• Purchase book is totaled as 10,000 instead of 1,00,000.Errors of omission:

The errors of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger.

• Error of complete omission: When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. For example, Credit purchases from Sam of 20,000 not entered in the Purchase Book.
• Error of partial omission: When the recording of transaction is partly omitted from the books, it is an error of partial omission. For example, credit sales had been duly recorded in the sales book but the posting from sales book to Sam’s account has not been made.

Errors of principle:

Accounting entries are recorded as per the generally accepted accounting principles, if any of these principles are violated or ignored, errors resulting from such violation are known as errors of principle.

Example:

• If a credit purchase of machinery is recorded in purchases book instead of journal proper.
• Rent paid to landlord is recorded in the cash book as payment to landlord.

Compensating Errors:

When two or more errors are committed in such a way that the net effect of these errors on the debits and credits of accounts is nil, such errors are called compensating errors.

Example:

• If purchases book has been overcast by 20,000 resulting in excess debit of 20,000 in purchases account and sales returns book is under cast by 20,000 resulting in short debit to sales return account is a case of two errors compensating each other’s effect.

Q.13 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 15,600 on the trial balance. However you have figured out that a correctly recorded credit purchase of pen drive for 3,500 was posted from the journal to the ledger with a 3,500 debit to office equipment and another 3,500 debit to creditors accounts.

Answer each of the following questions and present the amount of any misstatement:

1. Is the balance of the office equipment account overstated, understated or correctly stated in the trial balance?
2. Is the balance of the creditors account overstated, understated or correctly stated in the trial balance?
3. Is the debit column total of the trial balance overstated, understated or correctly stated?
4. Is the credit column total of the trial balance overstated, understated or correctly stated?
5. If the debit column total of the trial balance is 2,40,000 before correcting the error, what is the total of credit column.

Ans.

According to the given information, trial balance does not agree.

Pen drive is wrongly debited to office equipment instead of stationery account and supplier account is debited instead of crediting.

a) The balance of office equipment is overstated by 3,500.

b) The balance of creditors account is understated by 7,000.

c) The total of the debit column of the trial balance is correctly stated.

d) The total of the credit column of the trial balance is understated by 7,000.

e) If the total of the debit column of the trial balance is 2,40,000 before rectifying error, the total of the credit column of the trial balance is (2,40,000 – 7,000) = 2,33,000.

Q.14 Rectify the following errors:

1. Credit sales to Mohan 7,000 were not recorded.
2. Credit purchases from Rohan 9,000 were not recorded.
3. Goods returned to Rakesh 4,000 were not recorded.
4. Goods returned from Mahesh 1,000 were not recorded.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 7,000 To Sales A/c 7,000 (Being goods sold to Mohan were not recorded, now rectified) (b) Purchase A/c Dr. 9,000 To Rohan 9,000 (Being goods purchased from Rohan on credit not recorded, now rectified) (c) Rakesh Dr. 4,000 To Purchases Return A/c 4,000 (Being goods returned to Rakesh not recorded, now rectified) (d) Sales Return A/c Dr. 1,000 To Mahesh 1,000 (Being goods return by Mahesh not recorded, now rectified)

Q.15 Rectify the following errors:

1. Credit sales to Mohan 7,000 were recorded as 700.
2. Credit purchases from Rohan 9,000 were recorded as 900.
3. Goods returned to Rakesh 4,000 were recorded as 400.
4. Goods returned from Mahesh 1,000 were recorded as 100.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 6,300 To Sales A/c 6,300 (Being goods sold to Mohan for 7,000 recorded as 700, now rectified) (b) Purchases A/c Dr. 8,100 To Rohan 8,100 (Being goods purchased from Rohan on credit for 9,000 recorded as 900, now rectified) (c) Rakesh Dr. 3,600 To Purchases Return A/c 3,600 (Being goods returned to Rakesh 4,000 recorded as 400, now rectified) (d) Sales Return A/c Dr. 900 To Mahesh 900 (Being goods return by Mahesh 1,000 recorded as 100, now rectified)

Q.16 Rectify the following errors:

1. Credit sales to Mohan 7,000 were recorded as 7,200.
2. Credit purchases from Rohan 9,000 were recorded as 9,900.
3. Goods returned to Rakesh 4,000 were recorded as 4,040.
4. Goods returned from Mahesh 1,000 were recorded as 1,600.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Sales A/c Dr. 200 To Mohan 200 (Being goods sold to Mohan 7,000 were recorded as 7,200, now rectified) (b) Rohan Dr. 900 To Purchases A/c 900 (Being goods purchased from Rohan for 9,000 recorded as 9,900, now rectified) (c) Purchase Return A/c Dr. 40 To Rakesh 40 (Being goods returned to Rakesh 4,000 recorded as 4,040, now rectified) (d) Mahesh Dr. 600 To Sales Return A/c 600 (Being goods returned from Mahesh 1,000 recorded as 1,600, now rectified)

Q.17 Rectify the following errors:

1. Salary paid 5,000 was debited to employee’s personal account.
2. Rent paid 4,000 was posted to landlord’s personal account.
3. Goods withdrawn by proprietor for personal use 1,000 were debited to sundry expenses account.
4. Cash received from Kohli 2,000 was posted to Kapur’s account.
5. Cash paid to Babu 1,500 was posted to Sabu’s account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Salaries A/c Dr. 5,000 To Employees A/c 5,000 (Being Salary paid to employee 5,000, wrongly debited to employee’s personal account, now rectified) (b) Rent A/c Dr. 4,000 To Landlord A/c 4,000 (Being rent paid to landlord 4,000 wrongly posted to landlord’s personal account, now rectified) (c) Drawings A/c Dr. 1,000 To Sundry Expenses A/c 1,000 (Being goods withdrawn by proprietor for his personal use 1,000 was wrongly recorded as sundry expenses, now rectified) (d) Kapur Dr. 2,000 To Kohli 2,000 (Being cash received from Kohli, recorded in Kapur’s account, now rectified) (e) Babu Dr. 1,500 To Sabu 1,500 (Being cash paid to Babu was posted wrongly to Sabu’s account, now rectified)

Q.18 Rectify the following errors:

1. Credit sales to Mohan 7,000 were recorded in purchases book.
2. Credit purchases from Rohan 900 were recorded in sales book.
3. Goods returned to Rakesh 4,000 were recorded in the sales return book.
4. Goods returned from Mahesh 1,000 were recorded in purchases return book.
5. Goods returned from Mahesh 2,000 were recorded in purchases book.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 14,000 To Sales A/c 7,000 To Purchases a/c 7,000 (Being goods sold to Mohan on credit were recorded in purchase book, now rectified) (b) Sales A/c Dr. 900 Purchases A/c Dr. 900 To Rohan 1,800 (Being goods purchased from Rohan on credit were recorded in sales book, now rectified) (c) Rakesh Dr. 8,000 To Purchases Return A/c 4,000 To Sales Return A/c 4,000 (Being goods return to Rakesh wrongly recorded in Sales Return book, now rectified) (d) Sales Return A/c Dr. 1,000 Purchase Return A/c Dr. 1,000 To Mahesh 2,000 (Being goods returned by Mahesh was recorded in Purchase return book, now rectified) (e) Sales Return A/c Dr. 2,000 To Purchases A/c 2,000 (Being goods return from Mahesh, recorded in purchase return book, now rectified)

Q.19 Rectify the following errors:

1. Sales book overcast by 700.
2. Purchases book overcast by 500.
3. Sales return book overcast by 300.
4. Purchases return book overcast by 200.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Sales A/c Dr. 700 To Suspense A/c 700 (Being sales books overcast by 700, now rectified) (b) Suspense A/c Dr. 500 To Purchases A/c 500 (Being Purchase book overcast by 500, now rectified) (c) Suspense A/c Dr. 300 To Sales Return A/c 300 (Being sales return book overcast by 300, now rectified) (d) Purchases Return A/c Dr. 200 To Suspense A/c 200 (Being purchase return book overcast by 200, now rectified)

Q.20 Rectify the following errors:

1. Sales book undercast by 300.
2. Purchases book undercast by 400.
3. Returns Inward book undercast by 200.
4. Returns Outward book undercast by 100.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 300 To Sales A/c 300 (being sales book undercast by 300, now rectified) (b) Purchases A/c Dr. 400 To Suspense A/c 400 (Being purchase book undercast by 400, now rectified) (c) Returns Inward A/c Dr. 200 To Suspense A/c 200 (Being sales return book undercast by 200, now rectified) (d) Suspense A/c Dr. 100 To Returns Outward A/c 100 (Being return outwards undercast by 100, now rectified)

Q.21 Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

1. Credit sales to Mohan 7,000 were not posted.
2. Credit purchases from Rohan 9,000 were not posted.
3. Goods returned to Rakesh 4,000 were not posted.
4. Goods returned from Mahesh 1,000 were not posted.
5. Cash paid to Ganesh 3,000 was not posted.
6. Cash sales 2,000 were not posted.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 7,000 To Suspense A/c 7,000 (Being goods sold to Mohan on credit were not posted in his personal account, now rectified) (b) Suspense A/c Dr. 9,000 To Rohan 9,000 (Being goods purchased from Rohan were not posted in his personal account, now rectified) (c) Rakesh Dr. 4,000 To Suspense A/c 4,000 (Being goods returned to Rakesh were not posted to his personal account, now rectified) (d) Suspense A/c Dr. 1,000 To Mahesh 1,000 (Being goods returned by Mahesh were not posted to his personal account, now rectified) (e) Ganesh A/c Dr. 3,000 To Suspense A/c 3,000 (Being cash paid to Ganesh was not posted to his personal account, now rectified) (f) Suspense A/c Dr. 2,000 To Sales A/c 2,000 (Being cash sales was not posted to sales account, now rectified)
 Suspense Account Date Particulars Date Particulars (b) To Rohan 9,000 (a) By Mohan 7,000 (d) To Mahesh 1,000 (c) By Rakesh 4,000 (f) To Sales 2,000 (e) By Ganesh 3,000 To Balance c/d 2,000 14,000 14,000

Q.22 Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

1. Credit sales to Mohan 7,000 were posted as 9,000.
2. Credit purchases from Rohan 9,000 were posted as 6,000.
3. Goods returned to Rakesh 4,000 were posted as 5,000.
4. Goods returned from Mahesh 1,000 were posted as 3,000.
5. Cash sales 2,000 were posted as 200.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 2,000 To Mohan 2,000 (Being credit sales to Mohan for 7,000 wrongly posted in his personal account as 9,000, now rectified) (b) Suspense A/c Dr. 3,000 To Rohan 3,000 (Being credit purchase from Rohan for 9,000, wrongly posted in his personal account as 6,000, now rectified) (c) Suspense A/c Dr. 1,000 To Rakesh 1,000 (Being goods returned to Rakesh 4,000 wrongly posted as 5,000 now rectified) (d) Mahesh Dr. 2,000 To Suspense A/c 2,000 (Being goods returned from Mahesh for 1,000 wrongly posted as 3,000, now rectified) (e) Suspense A/c Dr. 1,800 To Sales A/c 1,800 (Being cash sales for 2,000 wrongly posted as 200, now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Mohan 2,000 (d) By Mahesh 2,000 (b) To Rohan 3,000 By Balance c/d 5,800 (c) To Rakesh 1,000 (e) To Sales A/c 1,800 7,800 7,800

Q.23 Rectify the following errors:

1. Credit sales to Mohan 7,000 were posted to Karan.
2. Credit purchases from Rohan 9,000 were posted to Gobind.
3. Goods returned to Rakesh 4,000 were posted to Naresh.
4. Goods returned from Mahesh 1,000 were posted to Manish.
5. Cash sales 2,000 were posted to commission account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 7,000 To Karan 7,000 (Being goods sold to Mohan, wrongly posted to Karan’s Account, now rectified) (b) Gobind Dr. 9,000 To Rohan 9,000 (Being credit purchase from Rohan wrongly posted to Gobind’s Account, now rectified) (c) Rakesh Dr. 4,000 To Naresh 4,000 (Being goods returned by Mahesh wrongly posted in Manish’s Account, now rectified) (d) Manish Dr. 1,000 To Mahesh 1,000 (Being goods returned by Mahesh wrongly posted in Manish’s Account, now rectified) (e) Commission A/c Dr. 2,000 To Sales A/c 2,000 (Being cash sales wrongly posted to commission account. Now rectified)

Q.24 Rectify the following errors assuming that a suspense account was opened. Ascertain the difference in trial balance.

1. Credit sales to Mohan 7,000 were posted to the credit of his account.
2. Credit purchases from Rohan 9,000 were posted to the debit of his account as 6,000.
3. Goods returned to Rakesh 4,000 were posted to the credit of his account.
4. Goods returned from Mahesh 1,000 were posted to the debit of his account as 2,000.
5. Cash sales 2,000 were posted to the debit of sales account as 5,000.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 14,000 To Suspense A/c 14,000 (Being goods sold to Mohan wrongly credited to his account, now rectified) (b) Suspense A/c Dr. 15,000 To Rohan 15,000 (Being goods purchased from Rohan for 9,000, wrongly debited to his as 6,000, now rectified) (c) Rakesh Dr. 8,000 To Suspense A/c 8,000 (Being goods returned to Rakesh, wrongly posted to credit in his account, now rectified) (d) Suspense A/c Dr. 3,000 To Mahesh 3,000 (Being goods returned by Mahesh for 1,000, wrongly debited to his account 2,000, now rectified) (e) Suspense A/c Dr. 7,000 To Sales A/c 7,000 (Being cash sales of 2,000 wrongly debited to sales account as 5,000, now rectified)
 Suspense Account Date Particulars Date Particulars (b) To Rohan 15,000 (a) By Mohan 14,000 (d) To Mahesh 3,000 (c) By Rakesh 8,000 (e) To Sales A/c 7,000 By Balance c/d 3,000 25,000 25,000

Q.25 Rectify the following errors assuming that a suspense account was opened. Ascertain the difference in trial balance.

1. Credit sales to Mohan 7,000 were posted to Karan as 5,000.
2. Credit purchases from Rohan 9,000 were posted to the debit of Gobind as 10,000.
3. Goods returned to Rakesh 4,000 were posted to the credit of Naresh as 3,000.
4. Goods returned from Mahesh 1,000 were posted to the debit of Manish as 2,000.
5. Cash sales 2,000 were posted to commission account as 200.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Mohan Dr. 7,000 To Karan 5,000 To Suspense A/c 2,000 (Being goods sold to Mohan for 7,000 wrongly posted to Karan’s account as 5,000, now rectified) (b) Suspense A/c Dr. 19,000 To Rohan 9,000 To Gobind 10,000 (Being goods returned by Rohan 9,000 wrongly posted to Gobind’s account 10,000, now rectified) (c) Rakesh Dr. 4,000 Naresh Dr. 3,000 To Suspense A/c 7,000 (Being goods returned to Rakesh 4,000 posted wrongly to Naresh’s account 3,000, now rectified) (d) Suspense A/c Dr. 3,000 To Mahesh 1,000 To Manish 2,000 (Being goods returned by Mahesh 1,000 wrongly posted to Manish account 2,000, now rectified) (e) Commission A/c Dr. 200 Suspense A/c Dr. 1,800 To Sales A/c 2,000 (Being cash sales for 2,000 wrongly posted to the commission account 200, now rectified)
 Suspense Account Date Particulars Date Particulars (b) To Mohan 9,000 (a) By Mohan 2,000 To Gobind 10,000 (c) By Rakesh 4,000 (d) To Mahesh 1,000 By Naresh 3,000 To Manish 2,000 By Balance c/d 14,800 (e) To Sales 1,800 23,800 23,800

Q.26 Rectify the following errors assuming that suspense account was opened. Ascertain the difference in trial balance.

1. Credit sales to Mohan 7,000 were recorded in Purchase Book. However, Mohan’s account was correctly debited.
2. Credit purchases from Rohan 9,000 were recorded in sales book. However, Rohan’s account was correctly credited.
3. Goods returned to Rakesh 4,000 were recorded in sales return book. However, Rakesh’s account was correctly debited.
4. Goods returned from Mahesh 1,000 were recorded through purchases return book. However, Mahesh’s account was correctly credited.
5. Goods returned to Naresh 2,000 were recorded through purchases book. However, Naresh’s account was correctly debited.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 14,000 To Sales A/c 7,000 To Purchases A/c 7,000 (Being goods sold to Mohan wrongly entered through purchase book, now rectified) (b) Purchases A/c Dr. 9,000 Sales A/c Dr. 9,000 To Suspense A/c 18,000 (Being goods purchased from Rohan, wrongly entered in sales book, now rectified) (c) Suspense A/c Dr. 8,000 To Purchases Return A/c 4,000 To Sales Return A/c 4,000 (Being purchase return wrongly entered through sales return book, now rectified) (d) Sales Return A/c Dr. 1,000 Purchases Return A/c Dr. 1,000 To Suspense A/c 2,000 (Being sales return from Mahesh wrongly entered through sales return book, now rectified) (e) Suspense A/c Dr. 4,000 To Purchase Return A/c 2,000 To Purchase A/c 2,000 (Being purchase return wrongly entered through purchase account, now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Sales A/c 7,000 (b) By Purchase A/c 9,000 To Purchase A/c 7,000 By Sales A/c 9,000 (c) To purchase Return A/c 4,000 (d) By Sales Return A/c 1,000 To Sales Return A/c 4,000 By Purchase Return A/c 1,000 (f) To Purchase Return A/c 2,000 By Balance c/d 6,000 To Purchase A/c 2,000 26,000 26,000

Q.27 Rectify the following errors:

1. Furniture purchased for 10,000 wrongly debited to purchases account.
2. Machinery purchased on credit from Raman for 20,000 was recorded through purchases book.
3. Repairs on machinery 1,400 debited to machinery account.
4. Repairs on overhauling of secondhand machinery purchased 2,000 was debited to Repairs account.
5. Sale of old machinery at book value of 3,000 was credited to sales account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Furniture A/c Dr. 10,000 To Purchases A/c 10,000 (Being purchase of furniture wrongly debited to purchase account, now rectified) (b) Machinery A/c Dr. 20,000 To Purchases a/c 20,000 (Being purchase of machinery wrongly recorded through purchase book, now rectified) (c) Repairs A/c Dr. 1,400 To Machinery A/c 1,400 (Being repair of machinery wrongly debited to machinery account, now rectified) (d) Machinery A/c Dr. 2,000 To Repair A/c 2,000 (Being repair (overhauling) of secondhand machinery (capital expenditure) wrongly debited to repair account, now rectified) (e) Sales A/c Dr. 3,000 To Machinery A/c 3,000 (Being machinery sold wrongly credited to sales account, now rectified)

Q.28 Rectify the following errors assuming that suspension account was opened. Ascertain the difference in trial balance.

1. Furniture purchased for 10,000 wrongly debited to purchases account as 4,000.
2. Machinery purchased on credit from Raman for 20,000 recorded through purchases book as 6,000.
3. Repairs on machinery 1,400 debited to Machinery account as 2,400.
4. Repairs on overhauling of second hand machinery purchased 2,000 was debited to Repairs account as 200.
5. Sale of old machinery at book value 3,000 was credited to sales account as 5,000.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Furniture A/c Dr. 10,000 To Purchases A/c 4,000 To Suspense A/c 6,000 (Being purchase of furniture for 10,000 entered wrongly in purchase book 4,000, now rectified) (b) Machinery A/c Dr. 20,000 To Purchases A/c 6,000 To Raman 14,000 (Being purchase of machinery 20,000 wrongly entered in purchase book as 6,000, now rectified) (c) Repair A/c Dr. 1,400 Suspense A/c Dr. 1,000 To Machinery A/c 2,400 (Being repair of machinery 1,400 wrongly debited to machinery account 2,400, now rectified) (d) Machinery A/c Dr. 2,000 To Repair A/c 200 To Suspense A/c 1,800 (Being overhauling of secondhand machine 2,000 wrongly debited to repair account as 200, now rectified) (e) Sales A/c Dr. 5,000 To Machinery A/c 3,000 To Suspense A/c 2,000 (Being sales of machinery for 3,000 wrongly credited to sales account as 5,000, now rectified)
 Suspense Account Date Particulars Date Particulars (c) To Machinery A/c 1,000 (a) By furniture A/c 6,000 To Balance c/d 8,800 (d) By Machinery A/c 1,800 (e) By Sales A/c 2,000 9,800 9,800

Q.29 Rectify the following errors:

1. Depreciation provided on machinery 4,000 was not posted.
2. Bad debts written off 5,000 were not posted.
3. Discount allowed to a debtor 100 on receiving cash from him was not posted.
4. Discount allowed to a debtor 100 on receiving cash from him was not posted to discount account.
5. Bills receivable for 2,000 received from a debtor was not posted.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Depreciation A/c Dr. 4,000 To Machinery A/c 4,000 (Being depreciation charged on machinery was not recorded, now rectified) (b) Bad Debts A/c Dr. 5,000 To Debtors A/c 5,000 (Being bad debts written off on debtors were not recorded, now rectified) (c) Discount Allowed A/c Dr. 100 To Debtors A/c 100 (Being discount allowed to debtor was not recorded, now rectified) (d) Discount Allowed A/c Dr. 100 To Suspense A/c 100 (Being Discount allowed to debtor was not recorded in discount account, now rectified) (e) Bills Receivable A/c Dr. 2,000 To Debtors A/c 2,000 (Being bill receivable received from debtors not recorded, now rectified)

Q.30 Rectify the following errors:

1. Depreciation provided on machinery 4,000 was posted as 400.
2. Bad debts written off 5,000 were posted as 6,000.
3. Discount allowed to a debtor 100 on receiving cash from him was posted as 60.
4. Goods withdrawn by proprietor for personal use 800 were posted as 300.
5. Bills receivable for 2,000 received from a debtor was posted as 3,000.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Depreciation A/c Dr. 3,600 To Machinery A/c 3,600 (Being depreciation charged on machinery 4,000, wrongly posted as 400, now rectified) (b) Debtors A/c Dr. 1,000 To Bad Debts A/c 1,000 (Being bad debts of 5,000 wrongly charged as 6,000, now rectified) (c) Discount Allowed A/c Dr. 40 To Debtors A/c 40 (Being discount allowed to debtors 100 wrongly recorded as 60, now rectified) (d) Drawings A/c Dr. 500 To Purchases A/c 500 (Being drawings of 800 wrongly recorded in the books as 300, now rectified) (e) Debtors A/c Dr. 1,000 To Bills Receivable A/c 1,000 (Being bills receivable for 2,000 received from debtor, wrongly posted as 3,000, now rectified)

Q.31 Rectify the following errors assuming that suspense account was opened. Ascertain the difference in trial balance.

1. Depreciation provided on machinery 4,000 was not posted to depreciation account.
2. Bad debts written-off 5,000 were not posted to debtors account.
3. Discount allowed to a debtor 100 on receiving cash from him was not posted to discount allowed account.
4. Goods withdrawn by proprietor for personal use 800 were not posted to drawings account.
5. Bills Receivable for 2,000 received from a debtor was not posted to Bills receivable account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Depreciation A/c Dr. 4,000 To Suspense A/c 4,000 (Being depreciation on machinery was not posted to depreciation account, now rectified) (b) Suspense A/c Dr. 5,000 To Debtor’s A/c 5,000 (Being bad debts written off were not posted to debtor’s account, now rectified) (c) Discount Allowed Dr. 100 To Suspense A/c 100 (Being discount allowed to customer, not posted to discount account, now rectified) (d) Drawings A/c Dr. 800 To Suspense A/c 800 (Being goods withdrawn for personal use not recorded in drawings account, now rectified) (e) Bills Receivable A/c Dr. 2,000 To Suspense A/c 2,000 (Being bills receivable received from debtors was not recorded in bills receivable account now rectified)
 Suspense Account Date Particulars Date Particulars (b) To Debtor’s A/c 5,000 By Depreciation 4,000 To Balance c/d 1,900 By Discount Allowed 100 By Drawings 800 By Bills Receivable A/c 2,000 6,900 6,900

Q.32 Trial balance of Anuj 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 Ravish 8,000 posted to his account as 6,000.
2. Returns inwards book overcast by 1,000.
3. Total of sales book 10,000 was not posted to sales account.
4. Credit purchases from Nanak 7,000 were recorded on sales book. However, Nanak’s account was correctly credited.
5. Machinery purchased for 10,000 was posted to purchases account as 5,000.
6. Rectify the errors and prepare suspense account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 2,000 To Ravish 2,000 (Being cash received from Ravish 8,000 wrongly posted to Ravish account, now rectified) (b) Suspense A/c Dr. 1,000 To Return Inwards A/c 1,000 (Being return inwards book overcast by 1,000 now rectified) (c) Suspense A/c Dr. 10,000 To Sales A/c 10,000 (Being Sales of 10,000 was not posted to sales account, now rectified) (d) Purchase A/c Dr. 7,000 Sales A/c Dr. 7,000 To Suspense A/c 14,000 (Being purchase figure of 7,000 was wrongly posted in sales book, now rectified) (e) Machinery A/c Dr. 10,000 To Purchase A/c 5,000 To Suspense A/c 5,000 (Being purchase of machinery for 10,000 recorded through purchase account as 5,000, now rectified)
 Suspense Account Date Particulars Date Particulars To Balance b/d 6,000 (d) By Purchase A/c 7,000 (a) To Ravish 2,000 (e) By Sales A/c 7,000 (b) To Return Inwards 1,000 By Machinery A/c 5,000 (c) To Sales A/c 10,000 19,000 19,000

Q.33 Trial Balance of Raju showed an excess debit of 10,000. He put the difference to suspense account and discovered the following errors.

1. Depreciation written-off the furniture 6,000 was not posted to furniture account.
2. Credit sales to Rupam 10,000 were recorded as 7,000.
3. Purchases book undercast by 2,000.
4. Cash sales to Rana 5,000 were not posted.
5. Old Machinery sold for 7,000 was credited to sales account.
6. Discount received 800 from Kanan on playing cash to him was not posted.

Rectify the errors and prepare suspense account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 6,000 To furniture 6,000 (Being depreciation on furniture was not posted to furniture account, now rectified) (b) Rupam Dr. 3,000 To Sales A/c 3,000 (Being sales of 10,000 to Rupam, recorded as 7,000 now rectified) (c) Purchases A/c Dr. 2,000 To Suspense A/c 2,000 (Being purchase book undercast by 2,000, now rectified) (d) Cash A/c Dr. 5,000 To Sales A/c 5,000 (Being cash sales to Rana was not recorded, now rectified) (e) Sales A/c Dr. 7,000 To Machinery A/c 7,000 (Being sales of old machinery, wrongly credited to sales account, now rectified) (f) Kanan Dr. 800 To Discount Received A/c 800 (Being discount received from Kanan not recorded now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Furniture 6,000 By Balance b/d 10,000 (b) To Sales 5,000 (c) By Purchase A/c 2,000 To Balance c/d 1,000 12,000 12,000

Q.34 Trial balance of Madan did not agree and he put the difference to suspense account. He discovered the following errors.

1. Sales return book overcast by 800.
3. Goods purchased on credit from Narula 4,000 though taken into stock, but no entry was passed in the books.
4. Installation charges on new machinery purchased 500 were debited to sundry expenses account as 50.
5. Rent paid for residential accommodation of madam (the proprietor) 1,400 was debited to Rent account as 1,000.

Rectify the errors and prepare suspense account to ascertain the difference in trial balance.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 800 To Sales Return A/c 800 (Being sales return book overcast by 800, now rectified) (b) Sahu Dr. 2,000 To Suspense A/c 2,000 (Being purchase return to Sahu was not recorded in his personal account, now rectified) (c) Purchases A/c Dr. 4,000 To Narula 4,000 (Being goods purchased from Narula not recorded, now rectified) (d) Machinery A/c Dr. 500 To Sundry Expenses A/c 50 To Suspense A/c 450 (Being installation charges on machinery 500 wrongly debited to machinery account 50, now rectified) (e) Drawings A/c Dr. 1,400 To Rent A/c 1,000 To Suspense A/c 400 (Being rent paid for proprietor’s residence 1,400, recorded as rent expenses for 1,000 now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Sales Return 800 (b) By Sahu 2,000 To Balance c/d 2,050 (d) By machinery 450 (e) By Drawings A/c 400 2,850 2,850

Q.35 Trial balance of Kohli did not agree and showed an excess debit of 16,300. He put the difference to a suspense account and discovered the following errors.

1. Cash received from Rajat 5,000 was posted to the debit of Kamal as 6,000.
2. Salaries paid to an employee 2,000 were debited to his personal account as 1,200.
3. Goods withdrawn by proprietor for personal use 1,000 were credited to sales account as 1,600.
4. Depreciation provided on machinery 3,000 was posted to Machinery account as 300.
5. Sales of old car for 10,000 was credited to sales account as 6,000.

Rectify the errors and prepare suspense account.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 11,000 To Rajat 5,000 To Kamal 6,000 (Being cash recived from Rajat 5,000 wrongly debited to Kamal’s account as 6,000 now rectified) (b) Salaries A/c Dr. 2,000 To Employees 1,200 To Suspense A/c 800 (Being salary paid 2,000 wrongly entered in employee’s personal account as 1,200, now rectified) (c) Sales A/c Dr. 1,600 To purchase A/c 1,000 To Suspense A/c 600 (Being goods withdrawn by proprietor 1,000 wrongly credited to sales account as 1,600 now rectified) (d) Suspense A/c Dr. 2,700 To machinery A/c 2,700 (Being depreciation charged or machinery 3,000 wrongly credited to machinery account 300 only, now rectified) (e) Sales A/c Dr. 6,000 Suspense A/c Dr. 4,000 To Car A/c 10,000 (Being sale of old car for 10,000, wrongly posted in sales account as 6,000, now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Rajat 5,000 By Balance b/d 16,300 To kamal 6,000 (b) By Salaries A/c 800 (d) To Machinery A/c 2,700 (c) By Sales A/c 600 (e) To Car 4,000 17,700 17,700

Q.36 Give journal entries to rectify the following errors assuming that suspense account had been opened.

1. Goods distributed as free sample 5,000 were not recorded in the books.
2. Goods withdrawn for personal use by the proprietor 2,000 were not recorded in the books.
3. Bills Receivable received from a debtor 6,000 was not posted to his account.
4. Total of Returns inwards book 1,200 was posted to Returns outwards account.
5. Discount allowed to Reema 700 on receiving cash from her was recorded in the books as 70.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Advertisement A/c Dr. 5,000 To Purchases A/c 5,000 (Being goods distributed as free sample 5,000 were not recorded in the books, now rectified) (b) Drawings A/c Dr. 2,000 To Purchases A/c 2,000 (Being goods withdrawn for personal use were not recorded 2,000, now rectified) (c) Suspense A/c Dr. 6,000 To Debtors A/c 6,000 (Being bills receivable received from debtors 6,000 was not posted to his account, now rectified) (d) Return Inwards Dr. 1,200 Return outwards Dr. 1,200 To Suspense A/c 2,400 (Being total of return inward book, posted to return outward book, now rectified) (e) Discount Allowed A/c Dr. 630 To Reema 630 (Being discount allowed to Reema 700 wrongly recorded as 70 only, now rectified)
 Suspense Account Date Particulars Date Particulars (c) To Debtors A/c 6,000 (d) By Return Inwards A/c 1,200 By Return Outwards A/c 1,200 By Balance c/d 3,600 6,000 6,000

Q.37 Trial balance of Khatau did not agree. He put the difference to suspense account and discovered the following errors:

1. Credit sales to Manas 16,000 were recorded in the purchase book as 10,000 and posted to the debit of Manas as 1,000.
2. Furniture purchased from Noor 6,000 was recorded through purchases book as 5,000 and posted to the debit of Noor 2,000.
3. Goods returned to Rai 3,000 recorded through the sales book as 1,000.
4. Old machinery sold for 2,000 to Maneesh recorded through sales book as 1,800 and posted to the credit of Manish as 1,200.
5. Total of Returns inwards book 2,800 posted to Purchase account.

Rectify the above errors and prepare suspense account to ascertain the difference in trial balance.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Suspense A/c Dr. 11,000 Manas Dr. 15,000 To Purchases A/c 10,000 To Sales A/c 16,000 (Being goods sold to Manas 16,000 wrongly recorded in purchase book as 10,000 and debited to his account as 1,000, now rectified) (b) Furniture A/c Dr. 6,000 Suspense A/c Dr. 7,000 To Noor 8,000 To Purchases A/c 5,000 (Being furniture purchased 6,000 wrongly recorded in purchase account as 5,000 and debited Noor’s account as 2,000, now rectified) (c) Sales A/c Dr. 1,000 Rai Dr. 2,000 To Return Outwards A/c 3,000 (Being goods returned to Rai 3,000, wrongly recorded in sales book as 1,000 now rectified) (d) Maneesh Dr. 1,200 Sales Dr. 1,800 Maneesh Dr. 2,000 To Machinery 2,000 To Suspense 3,000 (Being old machinery sold to Maneesh 2,000 wrongly recorded in sales account as 1,200 and credited to Manish’s account as 1,200 now rectified) (e) Return Inwards A/c Dr. 2,800 To Purchase A/c 2,800 (Being total of return inward book, wrongly posted to purchase book, now rectified)
 Suspense Account Date Particulars Date Particulars (a) To Sales A/c 11,000 (d) By Sundries (Manish, sales Maneesh) 3,000 (b) To Noor 7,000 By Balance b/d 15,000 18,000 18,000

Q.38 Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors:
a) In the sales book for the month of January total of page 2 was carried forward to page 3 as 1,000 instead of 1,200 and total of page 6 was carried forward to page 7 as 5,600 instead of 5,000.
b) Wages paid for installation of machinery 500 was posted to wages account as 50.
c) Machinery purchased from R & Co. for as 10,000 on credit was entered in Purchase Book as 6,000 and posted there from to R & Co. as 1,000.
d) Credit sales to Mohan 5,000 were recorded in Purchases Book.
e) Goods returned to Ram 1,000 were recorded in Sales Book.
f) Credit purchases from S & Co for 6,000 were recorded in sales book. However, S & Co. was correctly credited.
g) Credit purchases from M & Co. 6,000 were recorded in sales book as 2,000 and posted there from to the credit of M & Co. as 1,000.
h) Credit sales to Raman 4,000 posted to the credit of Raghvan as 1,000.
i) Bills receivable for 1,600 from Noor was dishonoured and posted to debit of allowances account.
j) Cash paid to Mani 5,000 against our acceptance was debited to Manu.
k) Old furniture sold for 3,000 was posted to Sales account as 1,000.
l) Depreciation provided on furniture 800 was not posted.
m) Material 10,000 and wages 3,000 were used for construction of building. No adjustment was made in the books.
Rectify the errors and prepare suspense to ascertain the difference in trial balance.

Ans.

 Rectification Entries in Journal Date Particulars L.F Dr. () Cr. () (a) Sales A/c Dr. 400 To Suspense A/c 400 (Being the net balance of sales book overcast by 400, now rectified) (b) Machinery A/c Dr. 500 To Wages A/c 50 To Suspense A/c 450 (Being wages paid for installation of machinery 500, wrongly posted to wages as 50, now rectified) (c) Machinery A/c Dr. 10,000 Suspense A/c Dr. 5,000 To Purchase A/c 6,000 To R & Co. 9,000 (Being purchase of machinery from R & Co 10,000 wrongly posted to purchase account as 6,000 and posted to R & Co account as 1,000, now rectified) (d) Mohan Dr. 10,000 To Sales A/c 5,000 To Purchases A/c 5,000 (Being goods sold to Mohan on credit wrongly posted in purchase account, now rectified) (e) Sales A/c Dr. 1,000 To Purchase Return A/c 1,000 (Being goods return to Ram, wrongly recorded as sales to Ram, now rectified) (f) Purchase A/c Dr. 6,000 Sales A/c Dr. 6,000 To Suspense A/c 12,000 (Being credit purchase was wrongly recorded in sales book only, now rectified) (g) Purchase A/c Dr. 6,000 Sales A/c Dr. 2,000 To M & Co. 5,000 To Suspense A/c 3,000 (Being purchased goods from M & Co 6,000 wrongly recorded in sales book as 2,000 and credited to M & Co Account 1,000 now rectified) (h) Raman Dr. 4,000 Raghvan Dr. 1,000 To Suspense A/c 5,000 (Being goods sold to Raman for 4,000 wrongly recorded to the credit of Ragvan’s account as 1,000 now rectified) (i) Noor A/c Dr. 1,600 To Allowance A/c 1,600 (Being bill dishonored received from Noor, wrongly debited to allowance account, now rectified) (j) Bills Payable A/c Dr. 5,000 To Manu 5,000 (Being amount of bills payable paid to Manu, wrongly debited to Manu’s account, now rectified) (k) Sales A/c Dr. 1,000 Suspense A/c Dr. 2,000 To Furniture A/c 3,000 (Being old furniture sold for 3,000, wrongly posted to sales book as 1,000, now rectified) (l) Depreciation A/c Dr. 800 To Furniture A/c 800 (Being depreciation on furniture was not recorded, now rectified) (m) Building A/c Dr. 13,000 To Purchase A/c 10,000 To Wages 3,000 (Being 10,800 material and 3,000 wages used for construction of building not recorded, now rectified)
 Suspense Account Date Particulars Date Particulars (c) To Purchase 5,000 (a) By Sales 400 (k) To Furniture 2,000 (b) By Machinery 450 To Balance c/d 13,850 (f) By Purchase 6,000 By Sales 6,000 (g) By Purchase 3,000 (h) By Raman 4,000 By Raghvan 1,000 20,850 20,850

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### 1. What do you understand by compensating for errors?

When there are bulk errors, and the effect on both the credit and debit sides of errors is null, it can be termed as compensating errors. Compensating errors have zero impact on the tallying of the trial balance. These are generally very difficult to be located since they occur in the same period and the same account.

### 2. How can you classify the errors?

There are four types of errors in general which are given below:

• Errors of commission occur due to the incorrect posting of transactions.
• Errors of omission occur while recording transactions.
• Errors of principles occur when principles are violated
• Compensating errors occur when there exist more than two errors.

### 3. What are the limitations of the trial balance?

Trial balances agree at times, but they should not be taken for granted. There are a few limitations to the trial balance like it fails to detect the errors that are not recorded in the journals. The compensating errors and mistakes also go unnoticed by the trial balance. When the transaction that has been originally recorded contains some errors, it is carried forward.