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:
| $ | |
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
| Date | Dr $ | Cr $ | |
2,020 Jan |
Explanation
Pihu
Journal
| 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)
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