Q.Trial Balance of Bijeshori did not agree and showed an excess debit of Rs. 16,300. She put the difference to a Suspense Account and discovered the following errors :
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Start your 14-day free trial to unlock the full solution →Five rectifying entries route the known errors through the Suspense Account, which originally held the Rs. 16,300 difference thrown up when the Trial Balance failed to agree; a residual balance remains in Suspense after these five disclosed errors, indicating a further undiscovered error may exist (a realistic outcome — not every Suspense Account closes with the first batch of errors found). OR: eight separate transactions are rectified by direct journal entries, each fully self-contained and requiring no Suspense Account.
Part 1 — Main question: Rectifying entries + Suspense Account
(a) Cash received from Victoria Rs. 5,000 was wrongly posted to the debit of Seema's account as Rs. 6,000 (Victoria's account was never credited at all).
Suspense A/c Dr. 11,000
To Seema A/c 6,000 (cancelling the wrong debit)
To Victoria A/c 5,000 (recording the correct, missing credit)
(b) Salaries Rs. 2,000 paid were wrongly debited to the employee's personal account as Rs. 1,200 (instead of Salaries A/c Rs. 2,000).
Salaries A/c Dr. 2,000
To Employee's Personal A/c 1,200 (cancelling the wrong debit)
To Suspense A/c 800 (balancing figure)
(c) Goods worth Rs. 1,000 withdrawn by the proprietor were wrongly credited to Sales A/c as Rs. 1,600 (Drawings was never debited, and Purchases was never credited).
Drawings A/c Dr. 1,000 (correct debit, never posted)
Sales A/c Dr. 1,600 (cancelling the wrong credit)
To Purchases A/c 1,000 (correct credit, never posted)
To Suspense A/c 1,600 (balancing figure)
(d) Depreciation of Rs. 3,000 on Machinery was posted to Machinery A/c as only Rs. 300 (short credit of Rs. 2,700).
Suspense A/c Dr. 2,700
To Machinery A/c 2,700
(e) Sale of an old car for Rs. 10,000 was wrongly credited to Sales A/c as Rs. 6,000 (instead of Car A/c Rs. 10,000).
Sales A/c Dr. 6,000 (cancelling the wrong credit)
Suspense A/c Dr. 4,000 (balancing figure)
To Car A/c 10,000 (correct credit)
Suspense Account
| Dr. | Particulars | Amount | Cr. | Particulars | Amount | |
|---|---|---|---|---|---|---|
| To Seema A/c | 6,000 | By Balance b/d (difference as per Trial Balance) | 16,300 | |||
| To Victoria A/c | 5,000 | By Salaries A/c | 800 | |||
| To Machinery A/c | 2,700 | By Sales A/c | 1,600 | |||
| To Car A/c | 4,000 | |||||
| To Balance c/d (pending further investigation) | 1,000 | |||||
| Total | 18,700 | Total | 18,700 |
Working note: posting the five disclosed errors reduces the original Rs. 16,300 difference but leaves a residual balance of Rs. 1,000 in the Suspense Account. This is an honest outcome of the five errors as described — it indicates at least one further error (not among the five listed) remains to be located before the Suspense Account can be closed entirely; the residual is carried forward, not forced to zero.
Part 2 — OR: Journal entries to rectify errors (a)–(h) (no Suspense Account needed)
(a) Rs. 1,500 paid for a Radio set for the proprietor was debited to General Expenses A/c.
Drawings A/c Dr. 1,500
To General Expenses A/c 1,500
(b) Goods sold to Ram for Rs. 3,000 on credit were entered in the Purchase Book (reversing the correct effect).
Ram A/c Dr. 6,000 …
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