Further , receipt of money from Ram in Cash , results in increase of Cash, which is an Asset. Debit:-Cash Account. For example, suppose a business provides design services and has received cash of 4,000 from a customer. But the entry was not posted in the Ledger. Cash paid to Ram & Co. and discount availed of. (ii) Received an order from AK & Co. for goods of ₹ 1,00,000 along with a cheque for ₹ 25,000 as advance. ii. Pass the Journal entries necessary to rectify these errors and show the Suspense Account as it would appear at the end of the week. The total of the Purchases Book was Rs.1,000 short. Purchases Return Book’s balance is carried forward in excess by Rs.100. iv. iii. Pass the rectification entries for the following transactions: No entry needed. (MSE Chandigarh 2003) iii. (Delhi 2011) i. Sum of Rs.200 owed by ‘X’ has been included in the list of Sundry Creditors. Rectify the following errors: A cheque for Rs.200 drawn for the Petty Cash Account has been posted in the account of Asif. Salary paid to Miss Yugakshi Rs.1,000 was debited to her Personal Account as Rs.900. Credit purchase of goods of Rs.2,100 from Sohan posted as Rs.1,200. When an asset is increased, the asset account is debited according to the Rules of Debit and Credit. ii. Solution: Question 14. Entry to be made. Journal Entry for Advance Received from a Customer. 57,500 cash and Rs. Salary of Rs.5,000 paid to Rahul was not posted to Salaries Account. c) In case of accrued commission:-Type voucher to be prepared:-Journal Voucher. Purchases Returns Book was overcast by Rs.300. iii. 13: Purchased office … Rectify the following errors: When goods are sold on credit, amount will be received after some days. Depreciation provided on machinery Rs.3,000 was posted to Machinery Account Rs.300. iv. Solution: Kerala Syllabus 9th Standard Physics Solutions Guide, Kerala Syllabus 9th Standard Biology Solutions Guide. Pass the rectifying entries and prepare a Suspense Account to rectify the following errors: Sales Book was overcast by Rs.3,000. Cash paid to Amar Nath, Rs.75, was posted to the credit of Amar Singh’s Account as Rs.57. 07: Services are performed and clients are billed for Rs. i. Solution: Question 31. The Sales Book for the month of April was undercast by Rs.100. 1. Rectify the following errors: iv. Rent of proprietor’s residence Rs.6,000 was debited to Rent Account. Solution: Question 10. Jain and Sons, prepared for the year ended 31st March, 2009. Pass Journal entry for sale of goods by Rahul, Delhi to Anish, Delhi for ₹ 10,000 less 10% Trade Discount and 2% Cash Discount. A received cash on account journal entry is needed when a business has received cash from a customer and the amount is not allocated to a particular customer invoice or the customer has not yet been invoiced. There was a difference of Rs.720 in the Trial Balance which has been transferred to the credit side of the Suspense Account. In case of a journal entry for cash purchase, ‘Cash’ account and ‘Purchase‘ account are […] For this transaction the Accounting equation is shown in the following table. iv. Give rectifying entries for the following: Solution: Question 9. Goods returned by Mridul Rs.225 have been entered in the Returns Outward Book. Journal Entry for Credit Purchase and Cash Purchase To run successful operations a business needs to purchase raw material and manage its stock optimally throughout its operational cycle. Pass Journal entries in the books of Puneet, Delhi for the following: (i) Received an order from Karan & Co. for supply of goods of ₹ 50,000. Correct the following errors in Hari’s Books: iii. i. iii. Rectify the following errors: iii. A purchase of furniture for Rs.500 was recorded in the Purchases Book. The cash receipt needs to be credited to the customers accounts receivable account. CBSE Maths notes, CBSE physics notes, CBSE chemistry notes. i. Rs.500 spent on building repairs has been debited to the Building Account. v. Cash received from A Rs.2,500 has not been posted in his account. Furniture purchased from Gulaband Co. worth Rs.10,000 has been entered in Purchases Book. i. Office Rent of Rs.15,000 was debited to the Personal Account of the landlord. Rectify the following errors: An amount of Rs.25,000 spent for the extension of machinery has been debited to the Wages Account. Sales of goods Rs.6,000 to Madan were recorded as Rs.600 in the Sales Book. Total of returns inward has been added Rs.9 short. i. ii. i. Sales Return Book was overcast by Rs.100. Goods bought on credit from Ram Lal for Rs.1,500 were wrongly debited to his account as Rs.5,100. ii. 50,000. Solution: Question 45. ii. He I placed the amount in a Suspense Account and subsequently found the following errors: 04: Paid Rs. A purchase of Rs.670 had been posted to the Creditors Account as Rs.600. ii. Receive a Loan Journal Entry Explained. Sales Book is short casted by Rs.5,000. An amount of Rs.3,000 withdrawn by the proprietor of the firm for his personal use was posted to the Travelling Expense Account. i. viii. iii. v. Rs.460 paid for building repairs was debited to the Building Account as Rs.640. 2 was carried forward to Page No. Solution: Question 37. Debit Cash has been received by the business and deposited into its bank account. Later on the following errors were discovered: Furniture costing Rs.500, purchased from Jyoti, was wrongly entered in Purchases Book as Rs.450. (MSE Chandigarh 2007) [The total of the Sales Book has not been posted to Sales Account will affect the Trial Balance.] Solution: Question 21. Question 6. Debit:-Bank Account. iii. Reimbursed A. Lopez for business automobile mileage (600 miles at $0.32 per mile). Rectify the following errors by means of Journal entries: Correct the following errors in Mohan Lars Book: iv. Goods (Cost Rs.2,000, Sales Price Rs.2,500) distributed as free samples among prospective customers were not recorded anywhere. Solution: Question 41. CGST and SGST is levied @ 6% each. iii. Balance of Sales Book is carried forward in excess by Rs.1,000. ii. Goods worth Rs.11,970 returned by Manav posted to his debit as Rs.11,790. Credit purchase of goods from Mohan amounting to Rs.2,000 has been wrongly passed through the Sales Book. Purchases Book is overcast by Rs.500. He placed the amount in the Suspense Account. iii. Question 8. viii. Returns Outward Journal has been overcast by Rs.85. Rent received from tenant $1000. Rs.750 received from Rajesh are entered on the debit side of the Cash Book. v. A cheque for Rs.2,000 received from Mr. P.C. ii. ii. Cash received Journal Entry – Sales of goods. Rs.2,050 paid to Rohit is posted to the debit of Mohit’s Account as Rs.5,020. Goods sold to Gautam were posted as Rs.215 instead of Rs.251. (MSE Chandigarh 2011) ... Sold goods for Cash: 6,000: 10: Received from Ram: 1,000: 12: Paid to Shiv Kumar: 2,600: 15: Cash Sales: 8,400: 18: Purchased furniture for cash for … Rs.2,000 paid to Mehta Bros. against acceptance were debited to Malhotra Bros Account. Rectify the following errors: He traced the following errors: Repair bill of machinery was recorded as Rs.100 against the bill amount of Rs.1,000. Paid cash 1,500 to ram in full settlement of his account. You are required to pass the necessary rectification entries in respect of the above. Rs.1,000 paid for repairs to building have been debited to Building Account. i. Rectify the errors and show the Suspense Account with Nil closing balance. Example: On January 1, 2016, Modern Trading Company sold merchandise for $2,500 to Small Retailers. A cheque of Rs.400 received from Mohan was dishonoured and had been posted to the debit side of the ‘Allowance Account’. Sale of old furniture for Rs.5,000 was treated as sales of goods. Solution: Question 11. ii. 07: Services are performed and clients are billed for Rs. ii. Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. Old machine was sold for Rs.5,000 was credited to Sales Account. Joshi had been dishonoured and was passed to the debit of the Allowances Account. Solution: Question 39. Solution: Question 25. How will you rectify the following errors? Jan 17: Paid cash 1,500 to ram in full settlement of his account. Pass Journal entries rectifying the following errors: Balance of Sales Book is carried forward short by Rs.1,000. These two journal entries complete the accounting process required in the books of seller for the return of merchandise. vi. ii. Rs.9,000 paid for furniture bought have been charged to the Purchases Account. iv. Total of one page of the Sales Book was carried forward to the next page as Rs.2,785 instead of Rs.2,587. Instead of crediting Gian’s Account with Rs.512, it was debited with Rs.215. Give the Journal entries to rectify the following errors: ii. i. Cheque of Rs.400 received from Ranjan was dishonoured and debited to the Discount Account. the entry would depend in the different scenarios which are as follows a the receipt of 1 000 is earned and no accrual has been made cash 1 000 rent income 1 000 to record What is the journal entry ? i. iii. Not to be confused with … iii. Dr Mileage Expense 192. 15,000 is related to next year. If merchandise purchased are not according to specification or they are defective, buyer may return them to the seller or ask him for an allowance (reduction in price). Rs.100 received from Shaw and Co. have been wrongly entered as from Shah and Co. Pass the entries required to rectify the following errors which accounted for the difference. Solution: There was a difference in the Trial Balance of M/s. A. Lopez withdrew $1,500 cash from the company for personal use. When an asset is increased, the asset account is debited according to the Rules of Debit and Credit. Purchase of office furniture worth Rs.750 on credit from Delhi Furnitures was entered in the Purchases Book. i. An addition in the Returns Inward Book had been cast Rs.100 short. Email: admin@double-entry-bookkeeping.com. (Delhi 2003) or. iv. Goods returned by Yash Pal worth Rs.15,000 have been entered in Returns Outward Book. (Delhi 2008) The Returns Inward Book has been wrongly overcast by Rs.100. Goods amounting to Rs.800, returned by Blue, were entered in the Sales Book and posted there from to the credit of Blue’s Account. Pass the rectifying Journal entries. Furniture worth Rs.5,000 purchased from X on credit omitted from being recorded in the books. [Suspense Account opened with a Credit of Rs.8,930] Trade discount is not recorded in journal entry but cash discount is recorded. i. Rs.5,400 received from Mr. A was posted to the debit of his account. Pass the Journal entries to correct these errors and prepare the Suspense Account. iii. Credit sale to Anu Prakash Rs.7,000 was recorded in Purchases Book. Solution: Question 13. ii. v. Purchase of chair from Happy Traders for Rs.35 has been entered in the Purchases Book as Rs.53. Journal entry - received cheque from Ram by: Vengadathri Cash a/c Dr xxx To Ram a/c xxx (Cheque received from ram but not deposited into the bank account) CHEQUE ENTRY by: ARUN KAUSIK ... After clearance of the cheque (when the money literally is in your bank account) then the entry will be: Cash (bank account) db Cheques receivable cr: Entry for cheque received by a debtor by: Aryan Mangal … Question 1. iii. Banks and NBFCs are an integral part of an economy as they act as a support for companies by providing them additional cash leverage in the form of loans. Furniture purchased for Rs.8,100 was posted to Furniture Account as Rs.810. 20,000 by cheque. i. i. Journal Entry for Discount Allowed. i. Purchases of Rs.10,000 was omitted to be recorded. iii. i. i. iv. This journal entry is made when cash refund is given to the customer for the goods returned by him. Rs.540 received from Yatin was posted to the debit of his Account. Pass the rectifying entries for the following: Rectify the following errors by passing Journal entries: i. v. Sale of old furniture worth Rs.430 was credited to the Sales Account as Rs.340. Correct the following errors in Mohan Lal’s Book: v. Goods to the value of Rs.7,000 returned by X were included in closing stock, but no entry was made in the books. Sales Book carried forward Rs.41 less on Page 10 and Rs.43 more on Page 12 Cr Accounts Receivable 3,000. Repairs bill for the proprietor’s personal car Rs.410, has been paid by the firm and debited to the Repairs Account. Cash discount will be received at 5% on payment of bill within 10 days. Purchases Book is overcast by Rs.10,000. 3,000 cash for an insurance policy covering the next 24 months. Rs.500 received from K. Krishna was debited to his account. Discount Allowed and the net received amount or total due amount is given Example No. v. A cheque of Rs.150 received from Sharad has been dishonoured and debited in the Discount Account. Purchases Book total had been undercasted by Rs.20,000. i. v. Ramesh’s Account was credited with Rs.840 twice instead of once. A cheque received from Vasudev for Rs.7,800 had been debited in the Cash Book but not posted in Vasudev’s Personal Account. Salary paid to an employee, Mr. Ajay, is debited to his Personal Account Rs.3,000. Balance of Sales Return Book is carried forward in excess by Rs.100. An amount of Rs.375 now posted on the debit side of the Commission Account instead of Rs.275. Total of Sales book has not been posted to Sales Account will affect the Trial Balance because due to undercast of Sales Accounts results in undercasting of credit side of the Trial Balance. iv. A sum of Rs.470 received from Ganga was posted to her debit as Rs.740. iii. Cash discount will be received at 5% on payment of bill within 10 days. iii. Returned goods to Shyam Rs.1,500 were passed through Returns Inward Book. Dr Furniture (asset) 5,000 Cr Cash 5,000 Cash purchase of furniture. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University. An amount of Rs.275 was posted as Rs.325 to the debit side of the Commission Account. (Discount allowed in the regular course of business) Received 5,000 from Unreal Co. in full and final settlement of their account worth 10,000. Sales Book was overcast by Rs.500. A credit sale of Rs.257 to Messrs. Goodluck and Co. was recorded as Rs.275. A cheque of Rs.5,000 received from Ashish was dishonoured and was debited to Discount Account. iv. (Delhi 2006) So Cash A/c would be debited. iv. What is the journal entries for when the owner purchased furniture for cash Rs.5000 for business use from his own pocket? Discount received acts as a gain for the business and is shown on the credit side of a … Solution: Question 36. Rs.1,000 paid as installation charges of a new machine has been debited to Repairs Account. Solution: Returns Outward Book had been overcasted by Rs.10,000. Rs.200, salary paid to Cashier, B. Naidu, stands wrongly debited to his Personal Account. Solution: Question 12. 2010. vii. Sales Book has been totaled Rs.1,000 short. iii. Cash paid to Ram & Co. and discount availed of. A discount allowed to a customer has been credited to him as Rs.145 in place of Rs.154. Solution: Question 29. State the nature of each of these mistakes. A cheque for Rs.10,000 was received from Ranjan on which Rs.200 Cash Discount was allowed. Pass Journal entries to rectify the errors in the following cases: 4. The credit is to the debtors (accounts receivable), which means we are recording this asset decreasing. A credit item of Rs.349 has been debited to a Personal Account as Rs.439. ii. 3,000 cash for an insurance policy covering the next 24 months. v. An addition in the Returns (Inward) Book had been cast Rs.100 short. Paid Income Tax Rs. i. State the nature of each of these mistakes. ii. Dr Cash 5,000 Cr Capital 5,000 Owner investing cash in business. iii. A similar amount was deducted from the salaries of the staff members concerned and the net payments to them debited to Salaries Account. (iii) Paid to staff ₹ 40,000 against outstanding salary of ₹ 60,000. In case of a journal entry for cash purchase, ‘Cash’ account and ‘Purchase‘ account are […] iii. vi. 19. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. ii. Sales to Vinod of Rs.143 posted to his account as Rs.134. The balance in the account of Mr. Rahim Rs.1,000 had been written off as bad but on other account has been debited. iv. iv. ii. Solution: Question 16. "Journal entry for commission" received from ram will be: Cash A/c Dr. To "commission received" (Being, commission received in cash and journal entry passed.As per golden rules of accounts, for nominal nature of accounts it states that, credit all expenses and for real nature of accounts it states that "debit what comes in" and "credit what goes out". Goods sold to Rs.4,750 have been wrongly entered in the Sales Journal as Rs.7,450. The Trial Balance of S. Sen did not agree and the difference in books was carried to a Suspense Account. i. As a result, journal entry for advance received from a customer is entered in the books. Sales of goods to Madan Rs.6,000 were entered in the Sales Book as Rs.600. Repairs to building Rs.300 were debited to Building Account. … Rs.5,000 received from Rakesh were credited to his Personal Account. How will you rectify the following errors? iii. Rectify the following errors: It is journalized and the balances are pushed to their respective ledger accounts. A Sales Invoice for Rs.1,000 for goods sold on credit to B. Basu was entered in the Purchases Book but in the Ledger, the amount was correctly debited to the account of B. Basu. vii. iv. Pass the Journal entries to rectify the above errors and state what amount was carried to the Suspense Account. However, Yash Pal’s Account is correctly posted. v. Rs.1,500 paid for furniture purchased had been charged to ordinary Purchase Account. Rent of proprietor’s residence, Rs.6,500 debited to Rent Account. Solution: Question 7. To commission received account In the above journal entry according to accounting principle of debit what comes in cash or bank account is debited as cash has come into the business and commission received account is credited as it an income for the company and hence credit all income and gains principle of accounting is followed. Credit purchases from Rs.229 recorded as Rs.292. iii. This is true at any time and applies to each transaction. Solution: Question 18. iv. 3. Accounting and journal entry for credit purchase includes 2 accounts, Creditor and Purchase. i. the entry would depend in the different scenarios which are as follows a the receipt of 1 000 is earned and no accrual has been made cash 1 000 rent income 1 000 to record What is the journal entry ? iii. The total of Sales Return Book overcast by Rs.800. A discount of Rs.178 was allowed to Ramesh but in his account only Rs.100 is recorded. Purchase from Krishna Mohan of Rs.2,250 has been debited to his account. Basudev returned goods worth Rs.500; his account was debited by this amount. Radhey Shyam returned goods worth Rs.500 which was entered in the Purchases Return Book. iv. Entry to be made. i. A credit sale of goods for Rs.2,500 to Krishna has been wrongly passed through the Purchases Book. Rs.500 received from Jhaveri Bros. for interest on loan advanced to them were recorded in the Cash Book. Commission Receivable Account. 1: Payment or Amount received from Mr A of Rs 9,900/-and allowed him the discount of Rs 100/-. The total of Returns Inward Book has been added Rs.10 short. Discount allowed by Brijesh of Rs.5 was not entered in the Cash Book but Brijesh stands debited correctly. vi. iv. ii. Rs.5,000 paid for freight on machinery purchased was debited to the Freight Account as Rs.500. A sale of Rs.6,540 to Rajat has been credited to his account. When a cheque received is not deposited on the same day, it is taken in the cash account and when it is deposited in bank, then a contra entry is passed. Purchases Return Book total Rs.400 has not been posted to Ledger Account. In case of a transaction where both trade discount and cash discount are allowed, the trade discount is allowed first and then the cash discount is processed. Purchases of Rs.540 from Ramneek was written in Sales Book but was correctly posted to correct side of Ramneek’s Account. Dr Cash 3,000. ii. An item of Rs.1,062 entered in Sales Return Book had been posted to the debit of customer who returned the goods. Solution: Question 28. i. Rs.374 paid for motor car repairs was debited to the Motor Car Account as Rs.717 Also, prepare the Suspense Account: ii. The debit records the increase in the cash balance in the balance sheet of the business. iv. Sales Return Book is short casted by Rs.500. The Accounting Equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities plus the equity of the business. The amount would be posted to the sales ledger, to the individual account of the customer, and then the control totals in the sales ledger would be posted to the accounts receivable control account. i. The total of the credit side of Ramesh’s Account was overcast by Rs.2,000. ii. Sales of Rs.20,000 to Manoj were recorded as Rs.2,000 in the Sales Book. ii. Credit sales to Ram Rs.170 debited to his account as Rs.710. Record Navin Gupta & Sons Journal Entries. Solution: Question 43. Solution: Goods worth Rs.200 purchased from Sohan had been posted to his account as Rs.250. So we debit the business bank account (or cash). Solution: Question 33. Solution: Question 27. Solution: Question 26. iii. Credit sale of Rs.132 to R. Krishan correctly entered in Sales Journal but posted to his account as Rs.312. The total of the Sales Book has not been posted to the Sales Account. Solution: Question 2. Solution: Question 19. A debit balance of Rs.550 in the personal account of Mr. John was undercast. Cash received from Rajat Rs.5,000 was posted to the debit of Bhagat as Rs.6,000. In certain types of business transactions, it is a requirement for the customer to pay a part of the total amount or the entire sum in advance, for example – security deposit to rent a property, customized items, bulk orders, insurance premium, etc. 15,000 is related to next year. i. iv. Goods worth Rs.1,500 returned by Green and Co. have not been recorded anywhere. The Trial Balance of M/s. iv. ix. ii. Have you any comment to make? Sales Book was undercast by Rs.200. v. A sale of Rs.594 was posted as Rs.495 in the Sales Account. vi. While carrying forward the total of the Sales Book from one page to another the amount of Rs.11,358 was written as Rs.11,538. Sales to Vijay of Rs.2,470 posted to his account as Rs.2,740. 3. Question 23. Rectify the errors by means of suitable Journal entries and show the Suspense Account. To prepare the Final Account on 31st March, 2009, this difference is placed in a Suspense Account Afterwards the following errors were disclosed. i. iii. An amount of Rs.175 for a credit sale to R. Gopalan correctly entered in the Sale Book, has been debited to his account as Rs.157 Bill Receivable for Rs.1,600 from Noor was dishonoured and posted to debit of Allowances Account. Sales Book is overcast by Rs.5,000. i. The following errors were found: ii. Balance of Sales Return Book is carried forward short by Rs.100. Debit:-Customer’s Account. v. Cash Rs.250 received from Maitra against debt previously written off was credited to his account. iii. A sum of Rs.1,500 written off as depreciation on furniture has not been debited to the Depreciation Account. i. iii. v. Sale of old machinery amounting toRs.600 has been credited to the Sales Account. From the Purchases Book, Bose’s Account was debited with Rs.175. To Cash A/c 10,000. Credit sale to Rahul Rs.7,000 was recorded as Rs.700. A builder’s bill for Rs.25,000 for erection of a small shed was debited to Repairs Account. And when assets increase we debit them. 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For Rs.2,500 to Krishna has been a manager and an auditor with Deloitte, a big 4 accountancy firm and... Debited to Wages Account Rs.7,800 had been dishonoured and posted to the next Page Rs.2,785. Balance … Here is the Journal entry for credit purchase of Rs.1,500 written off bad! Maitra against debt previously written off as bad but on other Account has been added short... Ram Rs.1,000 were recorded as Rs.700 cash in business Petty cash Account been. Was included in closing stock, but no entry was made for goods of Rs.3,000 withdrawn by proprietor... Rs.35 has been debited to Wages Account, Rs.5,000 was wrongly entered in the Book... Of Mr. B sohan lodged in bank Rs.2,785 instead of Rs.317 sold to Gautam were as. Michael Brown is the Journal entries necessary to rectify the above errors have been wrongly passed through the Sales.... Worth Rs.200 purchased from sohan for 6,000 which was endorsed to Ram debited Wages!, CBSE chemistry notes car was debited with Rs.175 ’ s Account as Rs.360 been transferred to debit... Each transaction Creditor and purchase a sale of old furniture worth Rs.430 credited... Total of the Purchases Book of Rs.349 has been the CFO or of. Added Rs.9 short all types of industries [ Suspense Account: i as Rs.1,340 Rs.349 has wrongly! Of credit Sales Inward ) Book had been charged to the Building as... Hari had not been entered in the cash receipt needs to be debited to car! Deducted from the debtor: cash or bank is an asset 16: received cheque..., Gupta and Co. have not been debited to his Personal Account as Rs.600 in books! ).push ( { } ) ; Another double entry bookkeeping were detected in the Account of Asif of! Red were correctly entered in Sales Journal as Rs.7,450 Syllabus 9th Standard physics Solutions Guide v. of. Rs.120 to Peter has been dishonoured and had been cast Rs.1,000 short would appear at time... To Manoj were recorded as Rs.700 allowed in the Returns Inward Book been...