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20 pro W On close scrutiny the following errors were discovered : (i) Closing stock was overvalued by * 4,000 (ii) A sale of 2,300 was recorded in Sales Day Book as 3,200,though it was rightly posted in Sales Account. (iii) The total of one page of Purchase Day Book was carried forward as 3,800 instead of *8,300. (iv) Outstanding telephone bill of 510 was not recorded in the books. (v) A collection of 2,000 from a customer was posted in the creditors account. (vi) Rent for one month 2,500 was recorded in the books as rent of the residential house of the proprietor.

20 pro W On close scrutiny the following errors were discovered : (i) Closing stock was overvalued by * 4,000 (ii) A sale of 2,300 was recorded in Sales Day Book as 3,200,though it was rightly posted in Sales Account. (iii) The total of one page of Purchase Day Book was carried forward as 3,800 instead of *8,300. (iv) Outstanding telephone bill of 510 was not recorded in the books. (v) A collection of 2,000 from a customer was posted in the creditors account. (vi) Rent for one month 2,500 was recorded in the books as rent of the residential house of the proprietor.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Liabilities Capital Net Profit during the year Loan Creditors Suspense A/c ₹ 98,500 45,700 50,000 22,150 2,110 2,18,460 Assets Furniture and other Fixed Assets Stock Debtors Fixed Deposits Bank Drawings R 59,500 61,000 38,190 25,750 19,820 14,200 2,18,460 On close scrutiny the following errors were discovered : (i) Closing stock was overvalued by ₹ 4,000 (ii) A sale of 2,300 was recorded in Sales Day Book as 3,200, though it was rightly posted in Sales Account. (iii) The total of one page of Purchase Day Book was carried forward as 3,800 instead of ₹ 8,300. (iv) Outstanding telephone bill of 510 was not recorded in the books. (v) A collection of 2,000 from a customer was posted in the creditors account. (vi) Rent for one month 2,500 was recorded in the books as rent of the residential house of the proprietor. (vii) Some old furniture were purchased at 2,000 for resale. But they were recorded in the books as fixed assets and deprecation was charged at 10% p.a. (viii) A Fixed Deposit of 5,000 matured and 7,500 was realized .But the entire amount was credited to Fixed Deposit Account. Show necessary Journal entries to rectify the errors. Prepare a Profit & Loss Adjustment Account and the Balance Sheet after the rectification. vibed adT [C.U.B.Com(Hons), 1995- Adapted
Transcribed Image Text:Liabilities Capital Net Profit during the year Loan Creditors Suspense A/c ₹ 98,500 45,700 50,000 22,150 2,110 2,18,460 Assets Furniture and other Fixed Assets Stock Debtors Fixed Deposits Bank Drawings R 59,500 61,000 38,190 25,750 19,820 14,200 2,18,460 On close scrutiny the following errors were discovered : (i) Closing stock was overvalued by ₹ 4,000 (ii) A sale of 2,300 was recorded in Sales Day Book as 3,200, though it was rightly posted in Sales Account. (iii) The total of one page of Purchase Day Book was carried forward as 3,800 instead of ₹ 8,300. (iv) Outstanding telephone bill of 510 was not recorded in the books. (v) A collection of 2,000 from a customer was posted in the creditors account. (vi) Rent for one month 2,500 was recorded in the books as rent of the residential house of the proprietor. (vii) Some old furniture were purchased at 2,000 for resale. But they were recorded in the books as fixed assets and deprecation was charged at 10% p.a. (viii) A Fixed Deposit of 5,000 matured and 7,500 was realized .But the entire amount was credited to Fixed Deposit Account. Show necessary Journal entries to rectify the errors. Prepare a Profit & Loss Adjustment Account and the Balance Sheet after the rectification. vibed adT [C.U.B.Com(Hons), 1995- Adapted
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