Page 138 - DEBK-XI(2020)

Rectification of Errors 17.5

(iv) A cheque for ` 7,500 received from S. Desai was credited to the account of R Ram.
(v) Goods to the value of ` 700 returned by X were included in the Closing Stock
but no entry was made in the books.
(vi) Goods costing ` 2,000 were purchased for various members of the staff and
the cost was included in “Purchases”. A similar amount was deducted from
the salaries of the staff members concerned and the net payments to them
debited to Salaries Account.
(vii) A bill of exchange (received from Pradeep) for ` 3,000 had been returned by
the Bank, with whom it had been discounted, as dishonoured and had been
credited to Bank Account and debited to Bills Receivable Account.
(viii) Goods sold to Mohan for ` 475 have been wrongly entered in the Sales Book
as ` 745.
Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Building A/c ...Dr. 20,000
To Repairs A/c 20,000
(Being the erection charges wrongly shown as revenue expenditure,
now rectified by capitalising the same)
(ii) Repairs A/c ...Dr. 5,000
To Plant and Machinery A/c 5,000
(Being the repairs wrongly capitalised instead of being treated as revenue
expenditure, now rectified)
(iii) Plant and Machinery A/c ...Dr. 7,000
To Wages A/c 7,000
(Being the wages for additions to Machinery wrongly treated as
Revenue expenditure, now rectified by capitalising the same)
(iv) R. Ram ...Dr. 7,500
To S. Desai 7,500
(Being the wrong posting of cheque received rectified)
(v) Returns Inward A/c ...Dr. 700
To X 700
(Being the returns inward not recorded by mistake, now rectified)
(vi ) Salaries A/c ...Dr. 2,000
To Purchases A/c 2,000
(Being the goods purchased for staff members wrongly recorded
as purchases, now rectified)
(vii) Pradeep ...Dr. 3,000
To Bills Receivable A/c 3,000
(Being the dishonour of discounted Bill recorded in the books as
Bills Receivable by mistake, now rectified)
(viii) Sales A/c ...Dr. 270
To Mohan 270
(Being the excess recording of sales in Sales Day Book rectified)