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11th Accountancy - Rectification of Errors Book Back Questions

Published on: 06/09/2019

Rectification of Errors

Download Tamil Nadu 11th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Questions:

Generic 2

3 x 2 = 6

What are compensating errors?

What is meant by error of principle?

The following errors were detected before the preparation of trial balance. Rectify them.
(a) Sales book is undercast by Rs. 100
(b) Sales book is overcast by Rs. 200
(c) Purchases book is undercast by Rs. 300
(d) Purchases book is overcast by Rs. 400

Generic 3

3 x 3 = 9

Write a note on error of principle by giving an example.

The following errors were located at the time of preparation of the trial balance. Rectify them.
(a) Sale of goods to Akila on credit for Rs. 1,520 posted to her account as Rs. 1,250.
(b) Bought goods from Narendran on credit for Rs. 5,500, credited to his account as Rs. 5,050.
(c) Purchase of furniture from Ravivarman for Rs. 404 on credit were debited to furniture account as Rs. 440.
(d) Purchased machinery for cash Rs. 2,000 was not posted to machinery account.
(e) The total of purchases book Rs. 899 was carried forward as Rs. 989.

The following errors were detected before preparation of the trial balance. Rectify them.
(a) A sum of Rs. 5,000 written off as depreciation on buildings has not been posted to depreciation account.
(b) Payment of wages Rs. 2,000 to Venkat was posted twice to wages account.
(c) An amount of Rs. 250 for a credit sale of goods to Nila, although correctly entered in the sales book, has been posted as Rs. 200.

Generic 5

2 x 5 = 10

A book-keeper finds that the debit column of the trial balance is short by Rs.308 and the difference is put to a suspense account. Subsequently, the following errors were located.
(a) An entry for sale of goods on credit for Rs.102 to Mekala was posted to her account as Rs.120.
(b) Rs.100 being the monthly total of discount allowed to customers was credited to discount received account in the ledger.
(c) Rs.275 paid by Mannan was credited to Kannan account.
(d) Rs. 26 appearing in the cash book as paid for the purchase of stationery for office use has not been posted to ledger.
(e) The purchases book was undercast by Rs.100.
Rectify the errors and prepare suspense account.

Rectify the following journal entries.
Particulars\ L.F. Dr. Cr. a Purchases A/c Dr 5,000 To Cash A/c 5,000 (Furniture purchased for cash) b Nila A/c Dr 8,000 To Cash A/c 8,000 (Salary paid to Nila) c Kuralamudhu A/c Dr. 2,000 To Cash A/c 2,000 (Rent paid to Kuralamudhu) d Cash A/c Dr 9,000 To Sales A/c 9,000 (Furniture sold for cash) e Cash A/c Dr 6,000 To Kothaimalar A/c 6,000 (Goods sold to Kothaimalar for cash)

Multiple Choice Question

5 x 1 = 5

The total of purchases book was overcast. Which of the following accounts should be debited in the rectifying journal entry?

(a)

Purchases account

(b)

Suspense account

(c)

Creditor account

(d)

None of the above

10.

Goods returned by Senguttuvan were taken into stock, but no entry was passed in the books. While rectifying this error, which of the following accounts should be debited?

(a)

Senguttuvan account

(b)

Sales returns account

(c)

Returns outward account

(d)

Purchases returns account

11.

The difference in trial balance is taken to _______.

(a)

The capital account

(b)

The trading account

(c)

The suspense account

(d)

The profit and loss account

12.

Errors not affecting the agreement of trial balance are _______.

(a)

Errors of principle

(b)

Errors of overcasting

(c)

Errors of undercasting

(d)

Errors of partial omission

13.

Error of principle arises when _______.

(a)

There is complete omission of a transaction

(b)

There is partial omission of a transaction

(c)

Distinction is not made between capital and revenue items

(d)

There are wrong postings and wrong castings

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Answers Key:

Generic 2

3 x 2 = 6

(i) The errors that make up for each other or neutralise each other are known as compensating errors. These errors may occur in related or unrelated accounts.
(ii) Thus, excess debit or credit in one account may be compensated by excess credit or debit in some other account. These are also known as offsetting errors.

Error of principle means the mistake committed in the application of fundamental accounting principles in recording a transaction in the books of accounts.

(a) Sales account should be credited with Rs. 100
(b) Sales account should be debited with Rs. 200
(c) Purchases account should be debited with Rs. 300
(d) Purchases account should be credited with Rs. 400
Tutorial Note:
(a) In this case, the sales book is undercast by Rs. 100. The total of sales book is posted to the credit side of sales account in the ledger. The undercasting has resulted in undercrediting of sales account by Rs. 100. This is an error of commission. The error is only in sales account. There is short credit in sales account by Rs. 100. Hence, it is rectified by crediting sales account by Rs. 100.

Generic 3

3 x 3 = 9

It means the mistake committed in the application of fundamental accounting principles in recording a transaction in the books of accounts.
The following are the possibilities of error of principle:
(i) Entering the purchase of an asset in the purchases book:
Example: Machinery purchased on credit for Rs. 10,000 by M/s. Anbarasi garments manufacturing company entered in the purchases book.
(ii) Entering the sale of an asset in the sales book:
Example: Sale of old furniture on credit for Rs. 500 was entered in the sales book.
(iii) Treating arevenue expenditure as a capital expenditure:
Example: All amount of Rs. 2,000 paid for repairs to a machine is debited to machinery account.
(iv) Treating a capital expenditure as a revenue expenditure:
Examples: An amount of Rs. 3,000 spent on the construction of an additional room is debited to repairs account.

(a) Akila account should be debited with Rs. 270
(b) Narendran account should be credited with Rs. 450
(c) Furniture account should be credited with Rs. 36
(d) Machinery account should be debited with Rs. 2,000
(e) Purchases account should be credited with Rs. 90

(a) Depreciation account should be debited with Rs. 5,000.
(b) Wages account should be credited with Rs. 2,000.
(c) Nila account should be debited with Rs. 50.

Generic 5

2 x 5 = 10

	Particulars		Dr. Rs	Cr. Rs
a	Suspense A/c	Dr	18
	To Mekala A/c			18
	(Excess amount posted to Mekala account rectified)
b	Discount allowed A/c	Dr	100
	Discount received A/c	Dr	100
	To Suspense A/c			200
	(Discount allowed wrongly posted to discount received account rectified)
c	Kannan A/c	Dr	275
	To Mannan A/c			275
	(Wrong credit to Kannan account instead of Mannan account rectified)
d	Stationery A/c	Dr	26
	To Suspense A/c			26
	(Purchase of stationery not posted to stationery account rectified)
e	Purchases A/c	Dr	100
	To Suspense A/c			100
	(Undercasting in the purchases book rectified)

Dr Suspense Account Cr
Particulars	Rs	Particulars	Rs
To Balance b/d	308	By Discount allowed A/c	100
To Mekala A/c	18	By Discount received A/c	100
		By Stationery A/c	26
		By Purchases A/c	100
	326		326

Particulars L.F. Dr. Cr. a Furniture A/c Dr 5,000 To Purchases A/c 5,000 (Purchase of furniture wrongly debited to purchases account rectified) b Salaries A/c Dr 8,000 To Nila A/c 8,000 (Salary paid to Nila wrongly debited to her account rectified) c Rent A/c Dr 2,000 To Kuralamudhu A/c 2,000 (Rent paid to Kuralamudhu wrongly debited to her account rectified) d Sales A/c 9,000 To Furniture A/c 9,000 (Furniture sold for cash wrongly credited to sales account rectified) e Kothaimalar A/c Dr 6,000 To Sales A/c 6,000 (Goods sold to Kothaimalar for cash wrongly credited to her account rectified)

Multiple Choice Question

5 x 1 = 5