In the Books of Mahender Journal Entries

Date	Particulars		L.F.	Debit  Amount (Rs)	Credit  Amount (Rs)
(i)	Suspense A/c	Dr.		7,500
	To Sales Returns A/c (Being Sales Return Book overcast by Rs 7,500, now rectified)				7,500
(ii)	Sales A/c	Dr.		4,000
	To Purchases Returns A/c (Being purchases returns wrongly recorded through Sales Book, now rectified)				4,000
(iii)	Furniture A/c			22,000
	To Purchases A/c				20,000
	To Suspense A/c (Being furniture purchased for Rs 22,000 wrongly debited to purchases account as Rs 20,000, now rectified)				2,000
(iv)	Drawings A/c	Dr.		1,000
	To Purchases A/c (Being goods withdrawn by proprietor for personal use not recorded, now rectified)				1,000
(v)	Salary A/c	Dr.		5,000
	To Employee's Personal A/c (Being salary paid wrongly debited to employee's personal account, now rectified)				5,000
(vi)	Purchases A/c	Dr.		500
	To Suspense A/c (Being purchases book undercast by Rs 500, now rectified)				500
(vii)	Vikas	Dr.		100
	To Discount Received A/c (Being discount received from Vikas not posted, now rectified)				100

Dr.                                 Suspense Account                           Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
	To Sales Returns A/c		7,500		By Difference as per
					Trial Balance		5,000
					By Furniture A/c		2,000
					By Purchases A/c		500
			7,500				7,500

There are four different types of errors that are usually committed in recording business transaction which are as follows:
(i) Errors of Commission: These are the errors which are committed due to wrong posting of transactions wrong totalling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of amount in the books of original entry, etc. For example, Rajhans Traders paid Rs 25,000 of Preetpal Traders (a supplier of goods). This transaction was correctly recorded in the cash book. But while posting to the ledger, Preetpals account was debited with Rs 2,500 only. This constitutes in error of commission. Such an error by definition is of clerical nature and most of the errors of commission are reflected in the trial balance.
(H)Errors of Omission: The error of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger. It can be of two types:
(a) Error of complete omission.
(b) Error of partial 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 sales to Mohan Rs 10,000, not entered in the Sales Book. When the recording of transaction is partly omitted from the books, it is an error of partial omission. If in the above example, credit sales had been duly recorded in the sales book but the posting from sales book to Mohan's account was not made, then, it will be the error of partial omission.
(iii) Errors of Principle: A transaction recorded in contravention of accounting principle is known as errors of principle. Such error where committed does not effect the trial balance as amounts are placed on the correct side but in a wrong account. Example of such error is treating the purchase of an asset and/or amount spent such as freight etc. on its acquisition as revenue expense instead of capital expenditure. The effect of such treatment is that financial results get distorted but the trial balance will agree. Continuing with the above example, the above treatment would result in lower profits than actual.
(iv) Compensating Errors: When two or more errors are committed in such a way that the net effect of these error on the debits and credits of accounts is nil, such errors are called compensating errors. Such errors do not affect the tallying of the trial balance.

                                                                 In the Books of Garima Rectifying Entries

Date	Particulars		L.F.	Debit amount (Rs)	Credit  Amount (Rs)
(i)	Sales A/c	Dr.		700
	To Suspense A/c (BeingSalesBookwas overcost by Rs 700, now rectified)				700
(ii)	Suspense A/c	Dr.		200
	To Returns Outward A/c (BeingReturns Outward book was undercast by Rs 200, now rectified)				200
(iii)	Rakesh	Dr.		7,800
	To Ramesh (Being Rs 7,800 paid to Rakesh was debited to Ramesh, now rectified)				7,800
(iv)	Keshav	Dr.		19,000
	To Suspense A/c (Being Rs 9,500 paid to Keshav was credited to his Account, now rectified)				19,000
(v)	Sales A/c			2,750
	To Purchases Returns A/c (Being Goods returned to Ganesh were recorded to Sales Account, now rectified)	Dr.			2,750
(vi)	Suspense A/c	Dr.		600
	To Discount A/c (Being discount received was posted to debit of discount account, now rectified)				600
(vii)	Bills Receivable A/c	Dr.		5,500
	Bills Payable A/c	Dr.		5,500
	To Rohit (Being Bills Receivable of Rs 5,500 was passed through Bills PayableBook, now rectified)				11,000

                                                            Journal Entries

Date	Particulars		L.F.	Debit  Amount (Rs)	Credit  Amount (Rs)
(i)	Suspense A/c	Dr.		650
	To Purchases A/c (Being purchases book was overcast, now rectified)				650
(ii)	Suspense A/c	Dr.		100
	To Charu (Being Charu's A/c rectified)				100
(iii)	Return Inward A/c	Dr.		2,500
	To Suspense A/c (Being Return inward A/c rectified)				2,500
(iv)	Suspense A/c	Dr.		500
	To Repair A/c (Being repairs account rectified)				500
(v)	Suspense A/c	Dr		5,060
	To Rakesh (Being Rakesh's A/c rectified)				5,060
(vi)	Suspense A/c	Dr.		3,000
	To Return outward A/c (Being Return outward account rectified)				3,000

(i)

Dr.                 Purchases Account                                                                Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
					By Error in over casting the total of Purchases Book		650

(ii)

Dr.                                   Cham's Account                                                         Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
					By Error in not posting the discount allowed. amount		100

(iii)

Dr.                                    Returns Inward Account                                             Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
	To Error in not posting the total of Returns Inward Book.		2,500

(iv)

Dr.                                Repairs Account                                                             Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
					By Error in debiting the account twice		500

(v)

Dr.                                         Rakesh's Account                                                 Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
					By Error in posting the wrong amount of purchases on the debit side		5,060

(vi)

Dr.                          Returns Outward Account                                                    Cr.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
					By Error in posting the wrong total of Return Outward Book		3,000

                Rectifying Entries

Date	Particulars		L.F	Debit  Amount (Rs)	Credit  Amount (Rs)
(i)	Garima	Dr.		900
	To Akash (Being an amount of Rs 1,000 received from Aakash wrongly recorded as Rs 100 and Rs 100 received from Garima wrongly recorded as Rs 1,000, now rectified)				900
(ii)	Pooja	Dr.		540
	To Pankaj (Being Rs 600 paid to Pooja wrongly recorded as Rs 60 and Rs 60 paid to Pankaj wrongly recorded as Rs 600, now rectified)				540
(iii)	Mohan	Dr.		900
	To Sohan (Being Mohan account debited with Rs 100 instead of Rs 1,000 and Sohan account debited with Rs 1,000 instead of Rs 100, now rectified)				900

Accounting entries are recorded as per the generally accepted accounting principles. If any of these principles are violation or ignored, errors resulting from such violated are known as errors of principle. An error of principle may occur due to incorrect classification of expenditure of receipts between capital and revenue. This is very important because it will have an impact on financial statements. It may lead to under / over stating of income on assets or liabilities etc. For example, (i) 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 is treated as a revenue expense. This is an error of principle. (ii) If a credit purchase of machinery is recorded in Purchase Book instead of journal proper on rent paid to the landlord is recorded in the cash book as payment to landlord are also errors of principle.

The following are the purposes of preparing a trial balances.
(i) To ascertain the arithmetical accuracy of the ledger accounts: The trial balance provides a useful check upon the ledger postings. If a trial balance tallies, it is proved that the posting to the ledger accounts.is correct. In other words, it ensures that both the aspects of each transaction have been posted into the ledger i.e. debit aspects have been posted on the debit side and the corresponding credit aspects on the credit side.
(ii) To help in locating errors: If a trial balance does not tally, it indicates that some errors have occurred and the accountant will then proceed to locate such errors even a small difference in the trial balance is to be given the same importance and attention as a large difference because it may be possible that there may be a number of errors which have off setted the effect of one another, resulting in a small composite difference.
(iii) To obtain a summary of the ledger accounts: A trial balance serves as a summary of all the ledger accounts. Scanning the trial balance enables one to know the assets, liabilities, expenses, incomes etc.
(iv) To help in the preparation of Final Accounts: As the trial balance contains if the list of all the Ledger accounts, it provides a basis for further processing of accounting data, i.e. preparation of final accounts namely. Trading and Profit & Loss Account and a Balance Sheet.

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
(i)	Suspense A/c                                                                        To Sales Returns A/c	Dr		1,000	1,000
	(Being SalesReturnsbook overcast by Rs 1,000,now corrected
(ii)	Purchases A/c    To Suspense A/c	Dr.		600	600
	(Being Purchases BookundercRsst by Rs. 600, now corrected)
(iii)	Sales A/c  To Suspense A/c	Dr		400	400
	(Being Error in carry forward of salesbook, now corrected)
(iv)	Sales A/c  To Returns Outward A/c	Dr		1,000	1,000
	(Being Returns outward wrongly recorded through sales book, now rectified)
(v)	Purchases  A/c  Sales  A/c          To M & Co.	Dr. Dr		8,000 8,000	16,000
	(Beingcreditpurchaseswronglyrecorded through sales book, now rectified)
(vi)	Purchases A/c    . Sales A/c              To Suspense  A/c	Dr Dr.		5,000 5,000	10,000
	(Beingcreditpurchaseswronglyrecorded through SalesBook, however supplier's Nc correctly credited, now rectified)
(vii)	Salary A/c To Employee's Personal A/c (Being salary paid wrongly debited to employee's personal account, now corrected)			2,000	2,000

Note: Errors in carrying forward the total of one page to another during a period finally affects the total of that book resulting in error of under/overcasting. In this case, carrying forward from page 4 to 5 resulted in under. casting of Rs 200 and carrying forward from page 8 to 9 resulted in overcasting of Rs 600. Overall overcasting being
Rs 600 - 200 = Rs 400.

Date	Particulars	L.F.	Amount (Rs)	Date	Particulars	L.F.	Amount (Rs)
	To Difference as per Trial Balance To Sales Returns A/c		10,000   1,000 ________ 11,000 ________		By Purchases A/c By Sales A/c By Purchases A/c By Sales A/c		600 400 5,000 5,000 ___________ 11,000 ___________

                                             Trial Balance

Name of Account	Balance Dr. (Rs)	Balance Cr. (Rs)
Bank overdraft		2,800
Cash-In-hand	400
Purchases Returns		800
Sundry Expenditures	2,400
Sales Returns	1,600
Salaries	1,600
Purchases	5,600
Sales		8,800
Creditors		2,400
Debtors	1,600
Opening Stock	2,000
Plant and Machinery	4,000
Capital		4,400
Total	19,200	19,200

Particulars	Balance Dr. (Rs)	Balance Cr. (Rs)
Capital		50,000
Purchases	18,000
Input CGST	2,640
Input SGST	2,640
Input IGST	4,200
Output CGST		3,000
Output SGST		3,000
Carriage	2,000
Sales		30,000
Returns Inward	3,000
Salaries	7,000
Sundry Debtors	20,000
Cash	10,000
Rent and Taxes	2,000
Drawings	3,000
Bank Balance	5,000
Furniture	10,000
Total	80,000	80,000