Rectification of Errors

 

Suspense Account and its Disposal :
In the chapter of Trial Balance we have learnt about the Suspense A/c

Important :

• When insprite of the effects, the Trial Balance does not tally, the difference is put to a newly opened account named Suspense A/c.
• Suspense A/c is an imaginary account, opened temporarily for the purpos of reconciling a Trial Balance.
• Later on when the errors affecting the Trial Balance are located, rectification entries are passed through the Suspense A/c.
• When all the errors are located and rectified, the Suspense A/c will be auto matically closed ie it will show zero balance.
• But if suspense A/c still shows a balance it will indicate tha certain errors are still to be discovered and rectified.

Problem : An accountant of a trading concern could not agree the Trial Balance.
There was an excess credit of Rs. 100 which he trfd to the suspense A/c.

The following errors were then subsequently discovered :

(1) Received Rs. 550 from X, were posted to the debit of his account.
(2) Rs. 100 being purchase return were posted to the debit of purchases A/c.
(3) Discount received Rs. 200 Correctly entered in the Cash Book but posted to the debit of the discount A/c.
(4) Salary paid Rs. 3,500 to x were posted to the salary A/c as Rs. 2,500.
(5) A purchase of Rs. 400 has been passed through Sales Book. However the customer's account has been correctly credited.

Give Rectifying entries and Suspense A/c
Rectifying Journal Etries

Date	Particulars	L.F	Debit Amount	Credit Amount
(1)     (2)   (3)	Suspense A/c         Dr To X (Amount received from x was posted to the wrong side now corrected)		1,100         200   400	1,100         100 100 400
	Suspense A/c         Dr To Purchase A/c To Purchase Returns A/c (For the purchase return wrongly posted to the purchases A/c)
	Suspense A/c         Dr To Discount A/c (Discount received was posted to the wrong side of discount A/c)

(4)   (5)	Salary A/c              Dr To Suspense A/c (Salary paid was posted to salary A/c with lesser amount)	1,000     400 400	1,000     800
	Purchases A/c        Dr Sales A/c               Dr To Suspense A/c (Purchases has been passed through sales book but the customer’s A/c has been correctly credited)

Suspense A/c

Date/ Error	Particular	J.F	(Rs)	Date	Particular	J.F	(Rs)
(1) (2) (3) (4)	To Defference in the Trial Balance   To × To Purchase A/c To Return A/c To Discount A/c		100     1,100 100 100 400	(4) (5) (i) (ii)	By Salary A/c By Purchases A/c By Sales A/c   Balance c/d		1,000 400 400   Nil
			1,800				1,800

Since the Balance of the suspense A/c is nil, it indicates that all the errors have been rectified.
Suggested Methodology
Discussion and Explanation method is suggested.

 

CBSE Accountancy Class XI ( By Mr. Aniruddh Maheshwari ) 
Email Id : [email protected]