IGCSE Accounting Paper-2: Specimen Questions with Answers 6 - 7 of 189

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Passage

Mr. Tendulkar՚s trial balance showed a suspense A/C of £ 32600 on the debit side. On rechecking the books, the following errors were discovered:

(i) An amount of £ 10000 received from Mr. Ganguly was posted to the debit side of Mr. Ashwin as £ 12000.

(ii) Salary paid to driver £ 4000 was debited to his personal A/C as £ 2400

(iii) Drawings of £ 2000 was credited to sales A/C as £ 3200

(iv) An amount of £ 6000 accounting for depreciation on car was posted as £ 600

(v) Sale of an old bat £ 20000 was credited to sales A/C as £ 12000

Question 6 (1 of 5 Based on Passage)

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Essay▾

How will Mr. Tendulkar rectify the above said errors in his books?

Explanation

Mr. Tendulkar rectifies the errors in his books by passing the reversal entry also called as the rectifying entry in his books of Accounts.

Rectifying Journal Entries in the Books of Mr. Tendulkar
DateParticularsL. FDebit AmtCredit Amt
(i)Suspense A/C Dr2000
Ganguly A/C Dr10000
To Ashwin A/C12000
(Being the excess amount received credited to suspense A/C)
(ii)Salary A/C Dr1600
To driver A/C1600
(Being salary for driver)
(iii)Sales A/C Dr3200
To drawings A/C2000
To suspense A/C1200
(Being Wrong credit to Sales A/C rectified)
(iv)Suspense A/C Dr5400
To car A/C5400
(Being Depreciation accounted for)
(v)Suspense A/C Dr8000
To Sales A/C8000
(Being the excess amount credited to sales A/C)

Question 7 (2 of 5 Based on Passage)

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Describe in Detail

Essay▾

Does Mr. Tendulkar՚s Trial balance tally after rectifying the above said errors If not what is done with the balance of suspense A/C?

Explanation

No, Mr. Tendulkar՚s trial balance does not tally even after the rectification of the discovered errors. There still exists a debit balance in the suspense A/C of £ 20400. This is because not all the errors have been detected. This debit amount will be carried forward to the next year and will be eliminated as and when other errors are identified.

Suspense a/C in the Books of Mr. Tendulkar
DateParticularsJ. FAmount

£

DateParticularsJ. FAmount

£

To Ashwin A/C2000By Balance B/D32600
To Car A/C5400By Sales A/C3200
To Sales A/C8000
To Balance C/D20400
3580035800
By Balance B/D20400

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