Rectify the following errors assuming that suspension account was opened. Ascertain the difference in trial balance. (a) Furniture purchased for ₹ 10,000 wrongly debited to purchase account as ₹ 4,000. (b) Machinery purchased on credit from Raman for ₹ 20,000 recorded through Purchases Book as ₹ 6,000. (c) Repairs on machinery ₹ 1,400 debited to Machinery account as ₹ 2,400. (d) Repairs on overhauling of second hand machinery purchased ₹ 2,000 was debited to Repairs account as ₹ 200. (e) Sale of old machinery at book value ₹ 3,000 was credited to sales account as ₹ 5,000.

> [!TLDR] > Same five errors as before but each is recorded at a *wrong amount too*, so besides moving the amount to the right account we also correct the figure — the unequal amounts spill into Suspense. Netting the Suspense postings gives **₹8,800 excess credit**. **Treatment.** For each item we (i) put the full correct amount into the right account, (ii) reverse the wrong amount actually recorded, and (iii) send the one-sided difference to Suspense. Item (b) is two-sided (Raman is a personal account under-credited), so it needs no Suspense. **Analysis** | Ref | Recorded (wrong) | Correct | Suspense effect | |---|---|---|---| | (a) | Purchases Dr 4,000 | Furniture Dr 10,000 | Cr 6,000 | | (b) | Purchases Dr 6,000; Raman Cr 6,000 | Machinery Dr 20,000; Raman Cr 20,000 | Nil (two-sided) | | (c) | Machinery Dr 2,400 | Repairs Dr 1,400 | Dr 1,000 | | (d) | Repairs Dr 200 | Machinery Dr 2,000 | Cr 1,800 | | (e) | Sales Cr 5,000 | Machinery Cr 3,000 | Cr 2,000 | **Rectifying Journal Entries** | Date | Particulars | L.F. | Debit (₹) | Credit (₹) | |---|---|---|---|---| | (a) | Furniture A/c ..............................Dr | | 10,000 | | | | To Purchases A/c | | | 4,000 | | | To Suspense A/c | | | 6,000 | | | *(Furniture ₹10,000 wrongly debited to Purchases as ₹4,000)* | | | | | (b) | Machinery A/c ..............................Dr | | 20,000 | | | | To Purchases A/c | | | 6,000 | | | To Raman A/c | | | 14,000 | | | *(Machinery from Raman ₹20,000 recorded in Purchases Book as ₹6,000)* | | | | | (c) | Repairs A/c ..............................Dr | | 1,400 | | | | Suspense A/c ..............................Dr | | 1,000 | | | | To Machinery A/c | | | 2,400 | | | *(Repairs ₹1,400 debited to Machinery as ₹2,400)* | | | | | (d) | Machinery A/c ..............................Dr | | 2,000 | | | | To Repairs A/c | | | 200 | | | To Suspense A/c | | | 1,800 | | | *(Overhaul ₹2,000 debited to Repa

Rectify the following errors assuming that suspension account was opened. Ascertain the difference in trial ba

Numerical Questions · Q15

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

(a) Furniture purchased for ₹ 10,000 wrongly debited to purchase account as ₹ 4,000.

(b) Machinery purchased on credit from Raman for ₹ 20,000 recorded through Purchases Book as ₹ 6,000.

(d) Repairs on overhauling of second hand machinery purchased ₹ 2,000 was debited to Repairs account as ₹ 200.

(e) Sale of old machinery at book value ₹ 3,000 was credited to sales account as ₹ 5,000.

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Concept understanding — Error Rectification

Error Rectification in Accountancy

The Everyday Intuition

Think of a diary where you record your daily expenses. One day you write "bought a book for ₹200" but later realise you actually spent ₹200 on a pen, not a book. Or you write ₹2000 instead of ₹200. Or you forget to write the entry altogether. What do you do? You don't tear out the page. You make a correction — neatly, with a note, so the record stays honest and clear.

That's exactly what error rectification is in accounting. Mistakes happen in books of accounts — wrong amounts, wrong accounts, wrong sides, or entries that were never made. The process of correcting these mistakes is called error rectification.

The Precise Meaning

An error in accounting is any mistake that causes the trial balance to disagree (or, in some cases, even if the trial balance agrees, the accounts are still wrong). Rectification means passing a rectifying journal entry (or, in some cases, making a simple adjustment in the ledger) to set the record straight.

Errors are broadly of two types:

Errors that affect the trial balance — the debit and credit totals don't match. These are usually one-sided mistakes (e.g., posting only the debit side of an entry).
Errors that do not affect the trial balance — the trial balance still tallies, but the accounts are wrong. These include:
- Error of omission (entry not recorded at all)
- Error of commission (wrong amount, wrong account, wrong side)
- Error of principle (e.g., treating a capital expense as revenue)
- Compensating errors (two mistakes that cancel each other out)

Important

The golden rule: If the trial balance disagrees, the error is located and corrected by a journal entry. If the trial balance agrees but the accounts are wrong, a rectifying journal entry is still needed — but the suspense account is not involved.

Why It Matters

A business's financial statements — the Profit & Loss Account and the Balance Sheet — are built from the trial balance. If errors remain, the profit figure is wrong, assets and liabilities are misstated, and the business makes decisions based on false numbers. Tax authorities, banks, and investors rely on these statements. Error rectification ensures that the accounts present a true and fair view.

Accounting Treatment: The Mechanics

The correction is always done through a journal entry (except for very minor posting errors that can be corrected by a ledger adjustment). The logic is simple:

If an account was debited when it should have been credited, you reverse the wrong debit and then put the correct credit.
If an amount was too small, you add the difference.
If an amount was too large, you subtract the difference.
If an entry was completely missed, you pass the correct entry now.

Example 1: Error of Commission (Wrong Account)

Scenario: Goods sold to Ram for ₹5,000 were correctly recorded in the Sales Book but posted to Shyam's account instead of Ram's account.

Effect: Ram's account is understated (no debit), Shyam's account is overstated (wrong debit). Sales is correct.

Rectification Entry:

Particulars	Debit (₹)	Credit (₹)
Ram's A/c Dr.	5,000
To Shyam's A/c		5,000
(Being correction of wrong posting — Ram debited instead of Shyam)

Example 2: Error of Omission

Scenario: Credit sales to Mohan for ₹10,000 were not recorded at all.

Effect: Mohan's account (debtor) is missing, Sales is missing. Trial balance still tallies (both sides missed equally), but accounts are wrong.

Rectification Entry:

Particulars	Debit (₹)	Credit (₹)
Mohan's A/c Dr.	10,000
To Sales A/c		10,000
(Being credit sales to Mohan now recorded)

Example 3: Error of Principle

Scenario: Purchase of machinery for ₹50,000 was debited to Purchases A/c instead of Machinery A/c.

Effect: Purchases (revenue expense) is overstated; Machinery (fixed asset) is understated. Profit is understated.

Rectification Entry:

Particulars	Debit (₹)	Credit (₹)
Machinery A/c Dr.	50,000
To Purchases A/c		50,000
(Being correction — capital expenditure wrongly treated as revenue)

Example 4: Error Affecting Trial Balance (Suspense Account)

Scenario: Sales of ₹8,000 were correctly recorded in the Sales Book but posted to the credit side of Sales A/c as ₹800 (short by ₹7,200).

Effect: Credit side of Sales A/c is short by ₹7,200. Trial balance will not tally — debit side exceeds credit by ₹7,200. A Suspense A/c is opened with a credit balance of ₹7,200 to make the trial balance tally temporarily.

Rectification Entry:

Particulars	Debit (₹)	Credit (₹)
Suspense A/c Dr.	7,200
To Sales A/c		7,200
(Being short posting of sales corrected — ₹800 posted instead of ₹8,000)

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Rectifying entries (Suspense A/c opened):

Ref	Rectifying entry	Debit (₹)	Credit (₹)
(a)	Furniture A/c Dr 10,000 — To Purchases A/c 4,000, To Suspense A/c 6,000	10,000	10,000
(b)	Machinery A/c Dr 20,000 — To Purchases A/c 6,000, To Raman A/c 14,000	20,000	20,000
(c)	Repairs A/c Dr 1,400, Suspense A/c Dr 1,000 — To Machinery A/c 2,400	2,400	2,400
(d)	Machinery A/c Dr 2,000 — To Repairs A/c 200, To Suspense A/c 1,800	2,000	2,000
(e)	Sales A/c Dr 5,000 — To Machinery A/c 3,000, To Suspense A/c 2,000	5,000	5,000

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Same five errors as before but each is recorded at a wrong amount too, so besides moving the amount to the right account we also correct the figure — the unequal amounts spill into Suspense. Netting the Suspense postings gives ₹8,800 excess credit.

Treatment. For each item we (i) put the full correct amount into the right account, (ii) reverse the wrong amount actually recorded, and (iii) send the one-sided difference to Suspense. Item (b) is two-sided (Raman is a personal account under-credited), so it needs no Suspense.

Analysis

Ref	Recorded (wrong)	Correct	Suspense effect
(a)	Purchases Dr 4,000	Furniture Dr 10,000	Cr 6,000
(b)	Purchases Dr 6,000; Raman Cr 6,000	Machinery Dr 20,000; Raman Cr 20,000	Nil (two-sided)
(c)	Machinery Dr 2,400	Repairs Dr 1,400	Dr 1,000
(d)	Repairs Dr 200	Machinery Dr 2,000	Cr 1,800
(e)	Sales Cr 5,000	Machinery Cr 3,000	Cr 2,000

Rectifying Journal Entries

Date	Particulars	Debit (₹)	Credit (₹)
(a)	Furniture A/c ..............................Dr	10,000
	To Purchases A/c		4,000
	To Suspense A/c		6,000
	(Furniture ₹10,000 wrongly debited to Purchases as ₹4,000)
(b)	Machinery A/c ..............................Dr	20,000
	To Purchases A/c		6,000
	To Raman A/c		14,000
	(Machinery from Raman ₹20,000 recorded in Purchases Book as ₹6,000)
(c)	Repairs A/c ..............................Dr	1,400
	Suspense A/c ..............................Dr	1,000
	To Machinery A/c		2,400
	(Repairs ₹1,400 debited to Machinery as ₹2,400)
(d)	Machinery A/c ..............................Dr	2,000
	To Repairs A/c		200
	To Suspense A/c		1,800
	(Overhaul ₹2,000 debited to Repairs as ₹200)
(e)	Sales A/c ..............................Dr	5,000
	To Machinery A/c		3,000
	To Suspense A/c		2,000
	(Old machinery ₹3,000 credited to Sales as ₹5,000)

Suspense Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Machinery A/c (c)	1,000	By Difference in Trial Balance	8,800

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set ANNUAL1 mark
$Q. Fill in the blank: Double side errors cannot be affect ________.$
›Reveal solutionSolution

Answer: The trial balance.

Double-sided (two-sided) errors - such as errors of omission, principle and compensating errors - affect two accounts equally on both sides, so the trial balance still agrees. …

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CBSE 2025Set ANNUAL1 mark
$Q. Answer in one word/sentence: What is called the errors which cancel the effect of each other out?$
›Reveal solutionSolution

Answer: Compensating errors.

Compensating errors are two or more errors that cancel out each other's effect, so the trial balance still …

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CBSE 2025Set ANNUAL1 mark
$Q. Answer in one word/sentence: Which errors are detected by the Trial balance?$
›Reveal solutionSolution

Answer: Errors that disturb the agreement (one-sided errors of commission).

A trial balance detects only those errors that make the two sides unequal - chiefly one-sided errors: wrong totalling (casting), posting a wrong amount, or posting to the wrong side. It cannot detect errors of omission, principle or compensating erro …

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CBSE 2024Set MARCH1 markMCQ
$Q. Wrong balancing of account is ________ .$
(a) Error of Commission
(b) Error of Omission
(c) Error of Principle
(d) Compensating Error
›Reveal solutionSolution

Wrong balancing of an account is an Error of Commission. Correct option: (a) Error of Commission.

Errors of commission are clerical errors committed while recording, posting, casting (totalling) or balancing accounts — for example, wrong totalling, wrong balancing, posting a wrong amount, or posting to the wrong side. Since “wrong balancing of account” is a mistake in computing the balance of a ledger account, it is a classic error of commission.

…

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CBSE 2023Set MARCH1 markMCQ
$Q. These type of errors affect the agreement of Trial Balance.$
(a) Error of complete omission
(b) Error of principle
(c) Compensating errors
(d) Error of partial omission
›Reveal solutionSolution
The error that affects the agreement of the trial balance is error of partial omission — option (d).

From the Kerala Plus One (DHSE) Accountancy chapter Trial Balance and Rectification of Errors:

Errors are of two broad kinds:

Errors that do NOT affect the trial balance (both debit and credit are equally wrong or both are missing): error of complete omission (the whole entry is left out), error of principle (wrong classification, but debit = credit), and compensating errors (two or more errors that cancel out). …
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CBSE 2022Set MARCH1 markMCQ
$Q. Which of the following is an error of commission?$
(a) Wages paid for installation of machinery debited to wages account
(b) Purchased goods for cash not recorded in cash book
(c) Wrong balancing of Furniture account
(d) Sale of fixed assets credited to sales account
›Reveal solutionSolution
Wrong balancing of Furniture account is an error of commission — option (c). Kerala Plus One (DHSE) Accountancy, Trial Balance and Rectification of Errors.

An error of commission is a clerical error made in recording, posting, totalling (casting) or balancing, where the right account is used but the mechanics go wrong (wrong amount, wrong side, wrong casting, wrong balancing).

Examining each option:

(a) Wages paid for installation of machinery debited to Wages A/c — a capital expenditure treated as revenue expenditure = error of principle.

(b) Purchase of goods for cash not recorded at all — a transaction completely left out = error of omission. …
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CBSE 2020Set MARCH1 markMCQ
$Q. If the trial balance agrees, it implies that,$
(a) a) There is no error in the books.
(b) b) There may be two sided errors in the books.
(c) c) There may be one sided error in the books.
(d) d) There may be both two sided and one sided errors in the books.
›Reveal solutionSolution

Correct option: (b). Agreement of the trial balance does not prove the books are error-free; only two-sided (equal-effect) errors can still be present.

A trial balance agrees when the total of debit balances equals the total of credit balances. This proves only arithmetical accuracy. Errors that affect two accounts equally on both sides — errors of complete omission, errors of principle and compensating errors — do not disturb this equal …

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CBSE 2018Set ANNUAL1 mark
$Q. What do you mean by compensating error? Or What is Suspense A/c?$
›Reveal solutionSolution

A compensating error is one offset by another error of equal and opposite effect; a Suspense A/c temporarily balances a disagreeing Trial Balance.

Compensating error: This occurs when the effect of one error is exactly neutralised by one or more other errors of an equal amount in the opposite direction. Because the excess debit of one error is cancelled by an equal excess credit of another, the Trial Balance continues to agree and the error is not easily detected. Example: Ram's account over-debited by Rs 500 and Shyam's account over-credited by Rs 500.

…

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CBSE 2018Set ANNUAL1 mark
$Q. Why is Rectification of Error necessary?$
›Reveal solutionSolution
Rectification of errors is necessary so that the accounts, profit/loss and Balance Sheet give a true and fair view.

If errors are left uncorrected, the ledger balances will be wrong, which in turn distorts the Trial Balance, the computed profit or loss, and the Balance Sheet. Rectification of errors is therefore necessary:

To show the correct balances of all affected accounts.

To arrive at the correct amount of profit or loss for the period.

To present a true and fair view of the financial position in the Balance Sheet. …
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Q.Rectify the following errors assuming that suspension account was opened. Ascertain the difference in trial balance.

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