FINANCIAL ACCOUNTING: RECTIFICATION OF ERRORS

3 Marks Questions:

Easy:

Q1. A credit purchase of goods worth ₹5,000 was wrongly recorded as a cash purchase. Rectify the error.

Answer:

Journal Entry for Rectification:

The error is that a credit purchase was recorded as a cash purchase, which means the creditor’s account has not been affected. Therefore, we need to credit the creditor’s account and rectify the cash account.

1. Rectification Entry:

Purchases A/c Dr.	5,000
To Cash A/c		5,000
(To cancel wrong entry)
Purchases A/c Dr. 5,000
To Creditors A/c		5,000
(To record correct entry)

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Medium:

Q2. Wages of ₹2,000 for installation of machinery were wrongly debited to the wages account. Pass the rectification entry.

Answer:

Wages for the installation of machinery should be capitalized and debited to the machinery account instead of the wages account.

1. Rectification Entry:

Machinery A/c Dr.	2,000
To Wages A/c		2,000
(To rectify the wages wrongly debited)

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Difficult:

Q3. ₹1,000 received from a debtor has been wrongly posted to the credit side of the creditor’s account. Rectify the error.

Answer:

Here, the debtor’s account should be credited, but it was wrongly posted to the creditor’s account. We need to correct both the creditor's and debtor's accounts.

1. Rectification Entry:

Creditors A/c Dr.	1,000
To Debtors A/c		1,000
(To correct the wrong posting)

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5 Marks Questions:

Easy:

Q1. Goods worth ₹3,000 were purchased and correctly entered in the purchases account, but were not posted to the creditor’s account. Additionally, sales of ₹4,000 were correctly recorded in the sales book but were not posted to the customer’s account. Pass the rectification entries.

Answer:

1. Rectification Entry for Purchases Not Posted:

Purchases A/c Dr.	3,000
To Creditors A/c		3,000
(Purchases not posted to the creditor’s account)

2. Rectification Entry for Sales Not Posted:

Debtors A/c Dr.	4,000
To Sales A/c		4,000
(Sales not posted to customer’s account)

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Medium:

Q2. Depreciation on machinery amounting to ₹10,000 was omitted to be provided in the books. Additionally, rent of ₹8,000 paid for a month was debited to the landlord’s account. Rectify these errors.

Answer:

1. Rectification Entry for Depreciation:

Depreciation A/c Dr.	10,000
To Machinery A/c		10,000
(Depreciation on machinery not recorded)

2. Rectification Entry for Rent Payment:

Rent A/c Dr.	8,000
To Landlord A/c		8,000
(Rent wrongly debited to landlord’s account)

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Difficult:

Q3. ₹7,500 paid for repairs of building was debited to the building account. Additionally, ₹12,000 received from a customer was credited to the sales account instead of the debtor’s account. Pass the rectification entries.

Answer:

1. The repairs amount of ₹7,500 should have been debited to the repairs account but was mistakenly debited to the building account. To correct this, we will debit the repairs account and credit the building account.

   Repairs A/c Dr.	7,500
   To Building A/c		7,500
   (Repairs wrongly debited to building account, now rectified)

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   2. Rectification Entry for Customer Payment:

   ₹12,000 received from the customer was wrongly credited to the sales account instead of the debtor’s account. To correct this, we will debit the sales account and credit the debtor’s account.

   Sales A/c Dr.	12,000
   To Debtors A/c		12,000
   (Amount received from the customer wrongly credited to sales, now rectified) If you have any suggestions or notice any discrepancies, please feel free to provide your comments. As human beings, errors can occur, and your feedback will help ensure accuracy and improvement.