IGCSE Accounting Paper-2: Specimen Questions with Answers 153 - 153 of 189
Passage
Pihu Jaiswal opened a laptop shop on 1 Jan 2020 with the following assets:
| $ | |
| Freehold shop premises | 45000 |
| Stock of laptop | 10000 |
| Cash (paid into a business bank account) | 4000 |
Pihu obtained a loan of $12000 from her friend, Komal on the same date and paid this into the bank account.
Question 153 (4 of 5 Based on Passage)
Write in Short
Short Answer▾Make the rectification entries in Pihu’s Journal to correct each of the above errors.
(Marks 8)
Pihu
Journal
| Date | Dr$ | Cr$ | |
| 2020 Jan |
Explanation
Pihu
Journal
| Date | Dr$ | Cr$ | |
| 2020 Jan (I) | Laptop | 4000 | |
| Purchases | 4000 | ||
| (II) | Rohan | 3000 | |
| Rehan | 3000 | ||
| (III) | Sales | 180 | |
| Sanyukta | 180 | ||
| (IV) | Shop fitting | 8500 | |
| Gautam Supplies | 8500 |
Explanation: (I) Laptop is an Asset here. To record increase in this assets, Laptop A/c will be debited. Purchases A/c was previously debited, so to nullify this effect, it would be credited.
(II) Rehan is the actual supplier. So, Rehan’s A/c would be credited. To nullify the credit entry in Rohan’s A/c, Rohan’s A/c would be debited.
(III) Normally, in a credit sales entry, Customer’s A/c is debited while the Sales A/c is credited. Since, the amount was overstated, the entry would be reversed to rectify this error.
(IV) Rectification entry for omission error is the same as normal entry.