IGCSE Accounting Paper-2: Specimen Questions with Answers 154 - 155 of 189

Passage

Pihu Jaiswal opened a laptop shop on 1 Jan 2,020 with the following assets:

Pihu Jaiswal Opened a Laptop Shop on 1 Jan 2,020
$

Freehold shop premises

45,000

Stock of laptop

10,000

Cash (paid into a business bank account)

4,000

Pihu obtained a loan of $ 12,000 from her friend, Komal on the same date and paid this into the bank account.

Question 154 (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

Pihu’s Journal to Correct Each of the Above Errors
Date

Dr

$

Cr

$

2,020

Jan

Explanation

Pihu

Journal

Pihu’s Journal to Correct Each of the Above Errors
Date

Dr

$

Cr

$

2,020

Jan (I)

Laptop

4,000

Purchases

4,000

(II)

Rohan

3,000

Rehan

3,000

(III)

Sales

180

Sanyukta

180

(IV)

Shop fitting

8,500

Gautam Supplies

8,500

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.

Question 155 (5 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

Which two of the above errors are of the same type? (Marks 1)

Explanation

Both are errors of commission. Recording transaction in a wrong account or in a right account but with a wrong amount, both are errors of commission.

Error of Commission constitutes the following-

  • Recording wrong amount in books of prime entry
  • Wrong totaling of the books

  • Posting wrong amount in ledger accounts

  • Wrong totaling of the ledger accounts

  • Posting at the wrong side of ledger accounts

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