Answered

e was a difference of ` 430 in a Trial
Balance. It was placed in the Debit side of
Suspense Account. Later on the following errors
IGNOUAssignmentGuru.com
[ 2 ] BCOC-131
were discovered. Pass the rectifying entries and
prepare the Suspense Account : 15, 5
(i) Purchase Book was overcast by ` 100.
(ii) Sales Book was overcast by ` 1,000.
(iii) Goods for ` 800 purchased from Umakant,
though entered in the Purchase Book has
not been posted to his account.
(iv) An amount of ` 500 has been posted to the
credit of Commission account instead of
` 570.
(v) Goods sold to Bharati for ` 4,400 has been
posted to her account as ` 4,000.
(vi) Goods sold to ‘X’ for ` 750 were recorded in
the Purchases Book

Answer :

katherine8459

To rectify the errors given and prepare the Suspense Account, let's pass the necessary rectifying entries step by step:

### Rectifying Entries:

1. **Rectify the overcast in Purchase Book by ` 100:**

Debit: Purchases Account (Decrease) - ` 100

Credit: Suspense Account - ` 100

2. **Rectify the overcast in Sales Book by ` 1,000:**

Debit: Suspense Account - ` 1,000

Credit: Sales Account (Decrease) - ` 1,000

3. **Goods purchased from Umakant, not posted to his account (` 800):**

Debit: Umakant's Account - ` 800

Credit: Purchases Account - ` 800

4. **Correct the posting to Commission account (` 570 instead of ` 500):**

Debit: Commission Account - ` 70 (Increase to correct to ` 570)

Debit: Suspense Account - ` 30 (Balance to Suspense Account for the difference)

Credit: Incorrect entry in Commission Account - ` 500

5. **Correct the sales to Bharati (` 4,400 instead of ` 4,000):**

Debit: Suspense Account - ` 400

Credit: Bharati's Account - ` 400

6. **Goods sold to 'X' (` 750) wrongly recorded in Purchases Book:**

Debit: X's Account - ` 750

Credit: Purchases Account - ` 750

### Preparing the Suspense Account:

Now, let's prepare the Suspense Account to reflect the adjustments made:

| Date | Particulars | Debit (`) | Credit (`) |

|------------|-----------------------------------------------|-----------|------------|

| | Balance b/d | 430 | |

| | To Purchases Account (overcast) | 100 | |

| | To Sales Account (overcast) | | 1,000 |

| | To Umakant's Account (goods not posted) | 800 | |

| | To Commission Account (incorrect posting) | 30 | 500 |

| | To Suspense Account (Bharati's sales correction)| 400 | |

| | To X's Account (goods wrongly recorded) | 750 | |

| Total | | 2,110 | 1,500 |

| | Balance c/d | 610 | |

| **Total** | | **2,540** | **2,540** |

### Explanation:

- **Suspense Account Balance Calculation:**

- Opening balance (initial difference) = ` 430 (Debit)

- Total debits = ` 2,110

- Total credits = ` 1,500

- Closing balance (now a credit balance) = ` 610

The Suspense Account now shows a credit balance of ` 610, indicating that errors have been rectified and the account is balanced. This balance should ideally be investigated further to ensure all transactions are correctly accounted for in the respective ledger accounts.

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