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Chapter3.3: Accounting Process-3 (Errors & Rectification) [3.3]-1

Rectifying Entry(fzj mskvabx `vwLjv)

fyj mvaviYZ `yB aiYit

1. GKZidv fyjth fyj WweU A_ev wWUi h Kvbv GKwU c RwoZ _vK, ZvK GKZidv fyj ejv nq|2.

`yZidv fyjth fyj WweU Ges wWU ywU cB RwoZ _vK, ZvK yZidv fyj ejv nq|

fyj mskvabi mgq ev chvq wZbwUt

1 iIqvwgj cZi c~e;

2 iIqvwgj cZi ci wKP~ovwnmve cZi c~e;

3 P~ovwnmve cZi ci|

hw` ckmskvabx `vwLjvi mgq DjL bv _vK Ze Zv iIqvwgj cZi ci wKP~ovwnmve cZi c~emskvabKiv nQ gb KiZ ne| G UxKv c`vb KiZ ne|

GK bRi fyj mskvabi cwZ

wgK mskvabi chvq GK Zidv fyj mskvab `yZidv fyj mskvab

1 iIqvwgj cZic~e

G aiYi fyj mskvabi Rb mskvabxRve`vi cqvRb nq bv| mswk LwZqvbwnmveLvZi fyji UvKvi cwigvY vivWweU ev wWU Ki mskvab KiZ nq|

RwoZ wnmve LvZmg~nK cqvRbgZWweU wWU Ki mskvabx `vwLjv w`Znq|

G KLbB Suspense A/CAvme bv|

2 iIqvwgj cZici wKP~ov

wnmve cZi c~e

fyj mskvabx `vwLjvq h Kvb GKwUc Suspense A/C_vKe|

h wnmve fyj _vK Zv wbq mskvabx`vwLjv w`Z ne|

H

3 P~ovwnmve cZici

GKwU c Suspense A/Cne|

Aci c gybvdvRvZxq nj ZvicwieZ Income SummaryAdjustment Ges g~jabRvZxq nj

mswk mw ev `vq wnmve nq|

fyj wnmvewU gybvdvRvZxq nj ZvicwieZIncome SummaryAdjustmentGes g~jabRvZxq nj

mswk mw ev `vq wnmveK WweU evwWU KiZ nq|

`ywU wnmveB gybvdvRvZxq nj Kvbvmskvabx `vwLjvi cqvRb bB|

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[3.3]-2 SAYEED AHMAD, BCS (General Education); Lecturer (Management); Cell: 01917542290

GKZidv I `yZidv fzjmg~n

K. GKZidv fyjmg~n (One sided errors)t

1. Kvb wbw` wnmveLvZi fyjt hgb- nvweeK c` 5000 UvKv Zvi wnmve 500 UvKvq WweU Kiv nqQ| G aiYi fyjjv nQt

(K) Kvb wnmve Kg jLv (Undercasting) : hgb- Sales account was under casted by Tk. 1000.

(L) Kvb wnmve ewk jLv (Overcasting) : hgb- Purchase account was overcastted by Tk. 1000.

(M) Kvb wnmve `yevi jLv (Recorded twice) : hgb- Sales to Razib Tk. 2,000 was wronglycredited twice to sales account.

(N) Kvb wnmveK wecixZ w`K jLv: hgb- Commission received Tk. 200 debited to Commissionaccount.

2. Kvb wekl Rve`v eBqi hvMdj wbYq fyjt hgb- Purchase book was overcast by Tk. 1000.

3. Kvb jb`bi GK c wnmvef~ bv njt hgb- Goods Tk. 500 sold to Asif and entered in the salesbook but was not posted into Asif account.

L. `yZidv fyjmg~n (Two sided errors)t

1. Kvb wekl Rve`v eBqi UvKvi AsK Kg ev ewk wjwce Kij t hgb- A purchase of Tk. 2,000 on accountentered in the Purchase Day Book as Tk. 200.

2. wekl Rve`v eB cwieZb Ki Kvb jb`b wjwce Kiv njt hgb- Credit purchase of goods of Tk. 1500has been wrongly entered through the Sales book.

3. GK wnmveLvZi cwieZ Ab wnmveLvZ jLv njt hgb- Purchase of furniture Tk. 500 was passedthrough the purchase account.

4. Kvb jb`b wnmvei eBZ Av` wjwce bv njt hgb- Sales return Tk. 400 was not recorded.

`yZidv fyj mskvabi Rb wbgv wZbwU avc AbymiY KiZ nqt

1 mw K `vwLjvtKx nIqv DwPZ wQj

2 fyj `vwLjvtKx Kiv nqQ

3 mskvabx `vwLjvt GLb Kx nIqv DwPZ

wekl Rve`v eB msv`vwLjvt

Purchase Book Sales Book Purchase Return Book Sales Return Book

Purchase........ Dr.

Account Payable.. Cr

Account Receivable Dr.

Sales............... Cr

Account Payable.. Dr.

Purchase Return.. Cr

Sales...... Dr

Account Receivable. Cr

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GKZidv fyj mskvabi wbqgvejx(iIqvwgj cZi ci)

1. Kvb wnmve Kg jLv njt G h wnmve Kg jLv nqQ m wnmveK evovZ ne| A_vr D wnmvewU ^vfvweKfve

WweU nj Zv mskvabx Rve`vq WweU Ges vfvweKfve wWU nj wWU KiZ ne| Abw`K wecixZ wnmvewU ne AwbwZwnmve| hgbt

jb`b mskvabx `vwLjv Debit Credit

Purchase account was under casted by Tk.

5000.

Purchase

Suspense

5,000

5,000

2. Kvb wnmve ewk jLv njt G h wnmve ewk jLv nqQ m wnmveK KgvZ ne| A_vr D wnmvewU

^vfvweKfve WweU nj Zv mskvabx Rve`vq wWU Ges vfvweKfve wWU nj WweU KiZ ne| hgbt

jb`b mskvabx `vwLjv WweU wWU

Goods sales to Tipu Tk. 500 was duly credited to

sales account but wrongly debited to his account

as Tk. 2,000

Suspense

Tipus

1800

1800

3. Kvb wnmve jLv bv njt hw` Kvb jb`bi GKwU c wnmvef~ bv Kiv nq, Ze ev` cov wnmvewU WweU ev wWU

KiZ ne| A_vr D wnmvewU ^vfvweKfve WweU nj Zv mskvabx Rve`vq WweU Ges ^vfvweKfve wWU nj wWU ne|

hgbtjb`b mskvabx `vwLjv WweU wWU

Goods Tk. 500 sold to Asif and entered in the

sales book but was not posted into Asif account.

Asif

Suspense

500

500

4. Kvb wnmve `yevi jLv njt Kvb wnmve GKevii cwieZ`yevi jLv nj AwZwi GKevi KgvZ ne| hgbt


Drawings account was debited twice by Tk.

2,500

Suspense

Drawings

2,500

2,500

5. Kvb wnmveK wecixZ w`K jLv njt AbK mgq Kvb wnmveK WweUi cwieZwWU ev wWUi cwieZWweU

Kiv nq| G mwVK `vwLjvi Rb GKevi Ges fyj mskvabi Rb GKevi gvU `yevi ev wY UvKv vivmskvabx `vwLjv w`Z ne|

A_vr Kvb wnmve WweUi cwieZwWU Kiv nj wY UvKv viv D wnmvewUK WweU KiZ ne| Avevi Kvb wnmveK wWUi

cwieZWweU Kiv nj wY UvKv viv wWU KiZ ne|


Commission received Tk. 2000 debited to

Commission account.

Suspense

Commission

4,000

4,000

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`yZidv fyj mskvabi wbqgvejx(iIqvwgj cZi ci)

1. Kvb wekl Rve`v eBZ Kg jLv njtG Kg AsKi Rb mswk wekl Rve`v eBqi Rb mvaviY Rve`v hv nq mskvabx Rve`v ZvB ne| hgbt

jb`b mskvabx `vwLjv WweU wWUA purchase of Tk. 2,000 on account entered inthe Purchase Day Book [not Purchase A/C] asTk. 200.

PurchaseAccount Payable

1,8001,800

2. Kvb wekl Rve`v eBZ ewk jLv njtG AwZwi AsKi Rb mswk wekl Rve`v eBqi Rb mvaviY Rve`v hv nq mskvabxZ Zvi wecixZ Rve`v ne|

hgbtjb`b mskvabx `vwLjv WweU wWU

A sale of Tk. 500 on account entered in theSales Day Book as Tk. 5,000

SalesAccount Receivable

45004,500

3. wnmvei cv_wgK eB cwieZb Ki jb`b wjwce Kiv njtG `ywU mskvabx Rve`v `vwLjv w`Z net

(a) fyj eBqi Rb wecixZ Rve`v

(b) mw K eBqi Rb mvaviY Rve`v

jb`b mskvabx `vwLjv WweU wWUCredit purchase of goods of Tk. 1500 has been

wrongly entered through the Sales book.

(a) Sales

Account Receivable

(b) PurchaseAccount Payable

1,500

1,5001,500

1,500

4. GK wnmve LvZi cwieZAb wnmveLvZ jLv njth wnmve fyj jLv nqQ mskvabx Rve`vq mwU WweU nj wWU Ges wWU nj WweU KiZ ne| Abw`K wecixZ

wnmvewU ne mswk mwVK wnmve|jb`b mskvabx `vwLjv WweU wWU

Purchase of furniture Tk. 5,000 was passed

through the purchase account.Furniture

Purchase5,000

5,000

5. Kvb jb`b wnmvef~ Kiv bv njtG D jb`bi Rb mvaviY Rve`v hv nq mskvabx Rve`v ZvB ne| hgbt

jb`b mskvabx `vwLjv WweU wWUSales return Tk. 500 was not recorded. Sales Return

Account Receivable

500

500

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olution

Problem-1 [NU-2011] Rectify the following errors by necessary journal entries:-

(i) The sales book has been overcast by Tk. 500

(ii) The cost of repair of office room Tk. 200 has been debited to purchase account.(iii) A payment of Tk. 2000 to Account payable has been debited to purchase account.

(iv) Goods worth Tk. 1,000 returned to supplier M/s Taher Traders entered in the sales book as a credit sales.

(v) Amount of Tk. 700 withdrawn by the proprietor for his personal expenses has been debited wrongly as tradeexpenses.

Solution: Problem-1

General Journal

(Rectifying Entries)

Date Description Ref. Debit Credit

i Sales Revenue

Suspense

(Sales book was overcasted, now rectified )

500

500

ii Office Maintenance

Purchase

(Purchase account was wrongly debited, now rectified)

200

200

iii Accounts Payable

Purchase

2000

2000

iv (a) Sales Revenue

Account Receivable

1000

1000(b) Accounts Payable

Purchase return & allowance

(Sales book was wrongly credited, now rectified)

1000

1000

v Drawings

Trade expense

(Trade expenses account was wrongly debited, now

rectified)

700

700

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Problem-2 Rectify the following errors by necessary journal entries:-

GK Zidv fzj:

a. Sales returns book was under cast by Tk. 4,000.

b. Purchase day book was overcasted by Tk. 3,000.

c. Discount received Tk. 500 was credited to the discount account as Tk. 5,000

d. Rent received Tk. 2,500 was debited to Rent Account.

e. Discount allowed Tk. 200 was not posted to Discount Account from cash book.

f. Salary paid to Jahid Tk. 6,000 was debited to Salaries account and again to Jahid account.

g. A sale of goods to Razi of Tk. 7,000 had been credited to his account.

h. Goods purchased from Akib amounting Tk. 5,000 were entered in the Purchase Day Book but were

omitted to be posted to his account in Creditors Ledger.

i Goods returned by Faruk of Tk 2,000 was not debited to Returns Inward Account [not ReturnsInward Book].

Solution: Problem-2

General Journal

(Rectifying Entries)

Date Description Ref. Debit Credit

a Sales

Suspense

(Sales return book was under casted, now rectified )

4,000

4,000

b SuspensePurchase

(Purchase day book was overcasted, now rectified )

3,0003,000

c Discount (5000-500)

Suspense

(Receipt of discount was overcasted, now rectified )

4,500

4,500

d Suspense

Rent Revenue (2500+2500)

(Rent revenue was wrongly debited, now rectified)

5,000

5,000

e Discount

Suspense

(Discount allowed was not posted, now rectified)

200

200

f Suspense

Jahid

(Jahids account was wrongly debited, now rectified)

6000

6000

g Razi (7000+7000)

Suspense

(Razis account was wrongly credited, now rectified)

14000

14000

h Suspense

Akib

(Akibs account omitted to be posted, now rectified)

5000

5000

i Returns inward

Suspense

(Return inward account was not wrongly debited, now rectified)

2000

2000

Problem-3 Rectify the following errors by necessary journal entries:-

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`yZidv fzj:a. Sales of Tk. 4,000 to Abir was not recorded in the Sales Day Book.

b. Goods received from from ABC Co. on the closing date of the year costing Tk. 2,000 was included

in inventory but invoice has not been received.

c. Wages paid for installation of Machinery Tk. 3,000 was debited to wages account.d. Goods costing Tk. 1,500 taken by the proprietor for his personal use had been debited to Sundry

Expenses Account.

e. Sale of Furniture of Tk. 2,800 had been credited to sales account.

f. Purchase of a Printer for Tk. 3000 had been debited to purchase account.

g. Repairs to office car for Tk. 3,000 were debited to office car account.

h Purchase from Razu Tk. 420 was entered in the Purchase Day Book as Tk. 240

i Purchase of furniture of Tk. 2000 passed throgh the Purchase book Tk. 20000

Solution: Problem-3

General Journal (Rectifying Entries)Date Description Ref. Debit Credit

a Accounts Receivable-Abir

Sales Revenue

(Sales was not recorded in Sales Day Book, now rectified )

4,000

4,000

b Purchase

Accounts Payable- ABC Co.

(Credit purchase was not recorded, now rectified )

2,000

2,000

c Machinery

Wages expense

(Installation of Machinery was wrongly debited to wages

account, now rectified)

3000

3000

d Drawings

Sundry Expenses

(Personal withdrawal was wrongly debited to sundry

expenses account, now rectified)

1,500

1,500

e Sales Revenue

Furniture

(Sale of furniture was wrongly credited to Sales account,

now rectified)

2,800

2,800

f Office Equipment

Purchase

(Purchase of printer was recorded as purchase, now rectified)

3,000

3,000

g Repairs

Office Car

(Repairs to office car was wrongly debited to office car account,

now rectified)

3,000

3,000

h Purchase (420-240)

Accounts Payable-Razu

(Purchase day book was under casted, now rectified)

180

180

i (a) Accounts Payable

Purchase

(b) Furniture

Accounts Payable

(Purchase of furniture was wrongly recorded through Purchasebook, now rectified)

20000

2000

20000

2000

Problem-4 [Kieso 9e: P2-4B] The trial balance of Syed Moiz Co. shown below does not balance.

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SYED MOIZ CO.

Trial Balance

June 30, 2010

Debit CreditCash 3340

Accounts Receivable 2731Supplies 1200

Office Equipment 2600

Accounts Payable 3666

Unearned Revenue 1100S. Moiz, Capital 8000

S. Moiz, Drawing 800

Service Revenue 2480

Salaries Expense 3200

Office Expense 810

12,441 17,486

Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal

reveals the following errors:

1. Cash received from a customer in payment of its account was debited for Tk. 480, and Accounts Receivable

was credited for the same amount. The actual collection was for Tk. 840.

2. The purchase of a computer on account for Tk. 620 was recorded as a debit to Supplies for Tk. 620 and a

credit to Accounts Payable for Tk. 620.

3. Services were performed on account for a client for Tk. 890. Accounts Receivable was debited for Tk. 890,

and Service Revenue was credited for Tk. 89.

4. A debit posting to Salaries Expense of Tk. 700 was omitted.

5. A payment of a balance due for Tk. 306 was credited to Cash for Tk. 306 and credited to Accounts Payable for

Tk. 360.

6.

The withdrawal of Tk. 600 cash for Moizs personal use was debited to Salaries Expense for Tk. 600 and

credited to Cash for Tk. 600.

Instructions : Prepare a correct trial balance.

Solution: Problem-4

SYED MOIZ CO.

Trial Balance

June 30, 2010

Particulars Debit Credit

Cash (3340+360) 3700

Accounts Receivable (2731-360) 2371Supplies (1200-620) 580

Office Equipment (2600+620) 3220

Accounts Payable (3666-360-306) 3000

Unearned Revenue 1100

S. Moiz, Capital 8000

S. Moiz, Drawing (800+600) 1400

Service Revenue (2480+801) 3281

Salaries Expense (3200+700-600) 3300

Office Expense 810

15,381 15,381

Problem-5 [Kieso 9e: P2-4A] The trial balance of the Sterling Company shown below does not balance

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STERLING COMPANY

Trial Balance

May 31, 2010

Debit Credit

Cash Tk. 5,850Accounts Receivable Tk. 2,750

Prepaid Insurance 700

Equipment 8,000

Accounts Payable 4,500

Property Taxes Payable 560

M. Sterling, Capital 11,700

Service Revenue 6,690

Salaries Expense 4,200Advertising Expense 1,100

Property Tax Expense 800

Tk. 26,800 Tk. 20,050

Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax

Expenses were each understated Tk. 100.

2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made , the

correct balances were Tk. 2,570 and Tk. 6,960, respectively .

3. A debit posting to Salaries Expense of Tk. 200 was omitted.

4. Tk. 1,000 cash drawing by the owner was debited to M. Sterling, Capital for Tk. 1,000 and credited to Cash

for Tk. 1,000.

5. A Tk. 520 purchase of supplies on account was debited to Equipment for Tk. 520 and credited to Cash for

Tk. 520.

6. A cash payment of Tk. 450 for advertising was debited to Advertising Expense for Tk. 45 and credited to

Cash for Tk. 45.7. A collection from a customer for Tk. 210 was debited to Cash for Tk. 210 and credited to Accounts Payable

for Tk. 210.

Instructions: Prepare a correct trial balance.

Solution: Problem-5

STERLING COMPANY

Trial Balance

May 31, 2010

Particulars Debit Credit

Cash (5850+520-405) Tk. 5,965Accounts Receivable (2570-210) 2360

Prepaid Insurance (700+100) 800

Supplies (0+520) 520

Equipment (8000-520) 7480

Accounts Payable (4500-100+520-210) 4710

Property Taxes Payable 560

M. Sterling, Capital (11700+1000) 12,700

M. Sterling, Drawings 1000

Service Revenue 6960

Salaries Expense (4200+200) 4,400

Advertising Expense (1100+405) 1505

Property Tax Expense (800+100) 900

Tk. 24,930 Tk. 24,930

Problem-6 [NU BBA (Hons)-2010] The trial balance of the Qashem & Co. shown below does not balance:

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QASHEM & CO.

Trial Balance

June 30, 2010

Debit Credit

Cash 3800

Accounts Receivable 2000Supplies 500

Office Furniture 2300

Land 46800

Accounts Payable 2000

Notes Payable 18300

Qashem, Capital 32100

Qashem, Drawing 3700

Service Revenue 4900Salaries Expense 1000

Rent Expense 600

Advertising Expenses 400

Telephone Expenses 200

Land Tax Expenses 10061400 57300

Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:

(i) The cash balance is understated by Tk. 400

(ii) Office Maintenance expenses of Tk. 200 is omitted from the trial balance.

(iii) Rent expenses of Tk. 200 was posted as credit rather than a debit;

(iv) The balance of advertising expenses is Tk. 300, but it was listed as Tk. 400 on the trial balance;

(v) A Tk. 600 debit to Accounts Receivable was posted as Tk. 60;

(vi) The balance for Telephone Expenses is overstated by Tk. 60;

(vii) A Tk. 500 debit to drawings account was posted as a credit to R. Qashem, Capital;

(viii) A Tk. 100 purchase of supplies on credit was neither journalized nor posted;

(ix) A Tk. 5600 credit to Service Revenue was not posted;

(x)

Office Furniture should be listed at an amount of Tk. 1,300.

Instructions: Prepare a correct trial balance as at June 30, 2010

Solution: Problem-6

QASHEM & CO.

Trial Balance

June 30, 2010

Debit Credit

Cash (3800+400) 4200

Accounts Receivable (2000+540) 2540

Supplies (500+100) 600Office Furniture 1300

Land 46800Accounts Payable (2000+100) 2100

Notes Payable 18300

Qashem, Capital (32100-500) 31600

Qashem, Drawing (3700+500) 4200Service Revenue (4900+5600) 10,500

Salaries Expense 1000

Rent Expense (600+200+200) 1000

Advertising Expenses 300

Telephone Expenses (200-60) 140

Land Tax Expenses 100

Office maintenance expense (0+200) 200

Suspense (62500-62,380) 120

62,500 62,500

ch 3.3 errors _s_

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