GSEB Class 11 Solutions Chapter 1 Rectification of Errors

1. Write the correct option from those given below each question:

 

Question 1. When a transaction is left unrecorded in primary books, the error is known as
(a) Errors of compensatory
(b) Errors of omission
(c) Errors of principle
(d) Not carry forward to Suspense A/c
Answer: (b) Errors of omission
In simple words: If a business deal is completely missed and not written down in the first accounting records, this mistake is called an error of omission.

Exam Tip: Understand the core characteristic of each error type. An error of omission means something was completely left out, not just wrongly recorded.

 

Question 2. An error arises because of non-compliance of accounting principles is known as
(a) Errors of compensatory
(b) Errors of omission
(c) Errors of principle
(d) Not carry forward to Suspense A/c
Answer: (c) Errors of principle
In simple words: When a mistake happens because basic accounting rules or principles are not followed, it is known as an error of principle.

Exam Tip: Errors of principle occur when transactions are recorded without following fundamental accounting rules, often confusing revenue and capital items.

 

Question 3. An error arises because of debiting or crediting a wrong account with correct amount on the correct side is known as
(a) Errors of compensatory
(b) Errors of omission
(c) Errors of principle
(d) Errors of recording to a wrong account
Answer: (d) Errors of recording to a wrong account
In simple words: This error occurs when the right amount is put on the right side (debit or credit), but it goes into the wrong account completely.

Exam Tip: Distinguish this from errors of principle; here, the *account* is wrong, not the accounting *treatment* (capital vs. revenue).

 

Question 4. When trial balance does not tally, it is tallied temporarily with the help of
(a) Trading A/c
(b) Suspense A/c
(c) Profit and Loss A/c
(d) Balance Sheet
Answer: (b) Suspense A/c
In simple words: If the trial balance does not match up, a Suspense Account is used temporarily to balance it until the actual mistakes are found and fixed.

Exam Tip: The Suspense Account is a temporary holding account used to balance the trial balance while errors are being located and rectified.

 

Question 5. By opening Suspense account, which of the following accounts brings effect on 'Profit and Loss Account?
(a) Error in Personal A/c
(b) Error in Assets A/c
(c) Error in both Personal A/c and Assets A/c
(d) Error in Goods A/c and Nominal A/c.
Answer: (d) Error in Goods A/c and Nominal A/c
In simple words: When you open a Suspense account, errors related to Goods Accounts and Nominal Accounts (like expenses or income) are the ones that will impact the Profit and Loss Account.

Exam Tip: Errors affecting nominal accounts (revenue, expenses, goods) directly influence profit, unlike errors in personal or asset accounts.

 

2. Answer the following questions in one sentence:

 

Question 1. State the types of accounting errors.
Answer: Accounting errors are divided into two categories, based on whether they impact the trial balance or not: 1. Errors that do not influence the trial balance. 2. Errors that do impact the trial balance.
In simple words: Accounting mistakes are split into two groups: those that change the trial balance and those that don't.

Exam Tip: Clearly distinguishing between errors affecting and not affecting the trial balance is fundamental to error rectification.

 

Question 2. State the errors not affecting the trial balance.
Answer: Here are the different kinds of errors that do not impact the trial balance:

• Errors of omission
• Errors of principle
• Errors of recording to a wrong account
• Errors committed at the time of recording in primary books
• Compensatory errors.

In simple words: Errors that don't make the trial balance unequal include missing entries, principle errors, wrong account entries, primary book mistakes, and offsetting errors.

Exam Tip: Errors not affecting the trial balance often involve equal debits and credits, or complete omissions, maintaining the balance.

 

Question 3. State the errors affecting the trial balance.
Answer: Below are the various types of errors that impact the trial balance:

• Errors regarding posting
• Errors regarding balance of an account
• Errors in totaling the subsidiary books
• Errors committed at the time of preparing the trial balance

In simple words: Errors that cause the trial balance to be unequal include posting mistakes, incorrect account balances, wrong totals in subsidiary books, and errors made during trial balance preparation.

Exam Tip: Errors affecting the trial balance usually result in an unequal total of debits and credits, indicating a single-sided mistake.

 

Question 4. When is the Suspense A/c used?
Answer: If the trial balance does not match even after many tries, the Suspense account helps to balance it. Briefly, Suspense A/c fixes errors. Besides error correction, Suspense A/c serves other uses, such as when the correct account to debit or credit cannot be decided, it is used. It is also used in journal entries when a businessperson prefers not to reveal a party's name.
In simple words: The Suspense Account is used to temporarily balance the trial balance when errors prevent it from tallying, and also for error rectification or when specific account names should not be revealed.

Exam Tip: Remember that the Suspense Account is a temporary measure, and its balance should eventually become zero once all errors are located and corrected.

 

Question 5. When does the accounting errors affect the profit?
Answer: When accounting mistakes impact the goods accounts and the income-expense accounts, these errors then influence the business's profit.
In simple words: Errors that impact goods or income/expense accounts will change the company's profit.

Exam Tip: Errors related to revenue and expense accounts directly impact the net profit, requiring careful attention to their rectification.

 

Question 6. When does the accounting errors do not affect the profit?
Answer: When accounting mistakes influence asset accounts or personal accounts, these errors do not change the business's profit.
In simple words: Errors affecting asset accounts or personal accounts will not change the company's profit.

Exam Tip: Errors in balance sheet accounts (assets, liabilities, capital) affect the financial position but do not directly alter the reported profit.

 

3. Answer the following questions in detail:

 

Question 1. What is errors of omission? How to rectify these errors? Explain with illustration.
Answer:
Meaning: When a transaction is completely missed and not written down in the journal or the subsidiary books or the ledger, such a mistake is known as an error of omission. The trial balance will still match even though this error occurs because recording is missed on both the credit and debit sides.
How to rectify these errors?
Errors of omission happen at two points:
1. A transaction is completely missed from being recorded in the journal or the subsidiary books or the ledger.
e.g., Goods sold to Rajan for Rs. 12,000 are not written in the books. This transaction is not recorded in the journal or in a subsidiary book. As a result, Rajan's account is not debited by Rs. 12,000, and the sales account is not credited by Rs. 12,000. So, there is an error on both the debit and credit sides with an equal amount, and therefore the trial balance will tally. For this, a rectification entry is passed as follows:

2. A transaction is completely recorded in the journal or the subsidiary books or the ledger, but posting for both accounts is missed.
e.g., A washing machine bought on credit from Sales India for Rs. 35,000 is recorded in the journal proper, but it is forgotten to be posted in the accounts of Washing machine and Sales India in the ledger. To fix this mistake, there is no need to record a journal entry in the journal proper, but the error will be rectified by debiting Washing machine A/c and crediting Sales India A/c in the ledger.
In simple words: An error of omission happens when a transaction is totally left out from being recorded. You fix it by making a new entry to add what was missed. For example, if you sell goods but don't record it, you would debit the customer and credit sales. If recorded in the journal but not posted to ledgers, you post directly to the ledger accounts.

Exam Tip: Errors of omission can be complete (not recorded at all) or partial (recorded in one book but not posted to ledger). Complete omissions do not affect the trial balance.

 

Question 2. What is errors of principle? How to rectify these errors? Explain with illustration.
Answer:
Meaning: An error of principle means that when preparing the books of accounts, the basic accounting rules are not followed. These kinds of errors do not impact the trial balance. This is because the amount of the transaction is the same, but an incorrect account is debited or credited instead of the proper one.
How to rectify these errors?
In such errors, capital expenditure is wrongly treated as revenue expenditure, or capital income is treated as revenue income and recorded in the books accordingly.
e.g., An old machine of Rs. 6,000 sold to Sunder Patel is recorded in the sales book. Here, the machine is an asset of the business, so it should not have been credited to the sales account (it should have been credited to the machine account), which means a wrong account was recorded, violating a principle. Even with this kind of error, the trial balance will match because the debited and credited amounts are the same. So, a rectification entry is passed as follows:

In simple words: An error of principle happens when you don't follow basic accounting rules, like treating a capital expense as a revenue expense. To fix it, you reverse the wrong entry and make the correct one, ensuring the right accounts are debited and credited.

Exam Tip: Always analyze whether an expenditure is for long-term benefit (capital) or short-term operation (revenue) to avoid errors of principle.

 

Question 3. What is compensatory errors ? How to rectify these errors ? Explain with illustration.
Answer:
Meaning: In the books of accounts, when more than one error exists, but their offsetting impacts on both debit and credit sides cause the trial balance to match, such errors are known as compensatory errors. In this kind of error, the influence of one or more errors on one side is canceled out by the influence of one or more errors on the other side. This means, if there is an error of the same amount on the debit side and the credit side, then the effect of the error in totaling will be eliminated, and the trial balance will match.
How to rectify these errors?
e.g., Goods of Rs. 4,000 sold to Dhaval, which is debited to his account as Rs. 400, while Rs. 3,600 received from Ishita is not posted to her account. Here, Dhaval's account is debited less by Rs. 3,600, which is compensated by the error of Rs. 3,600 received from Ishita and not credited to her account. Therefore, the trial balance will tally. So, a rectification entry is passed as follows:

In simple words: Compensatory errors are multiple mistakes that cancel each other out, making the trial balance appear correct. To fix them, you need to identify each individual error and pass separate or combined rectification entries to correct the specific accounts affected.

Exam Tip: Compensatory errors are tricky because the trial balance still tallies, making them harder to detect without a detailed audit of transactions.

 

Question 4. Write note on Suspense Account.
Answer:
Meaning: If the trial balance does not match due to some accounting mistakes, and it needs more time to prepare final accounts after finding and fixing these errors, but there is an urgent need to prepare final accounts, then the difference in the trial balance is temporarily moved to one account to make it tally. That account is known as a 'Suspense Account'. If the debit column of the trial balance shows an amount, then the Suspense Account has a debit balance. If the credit column of the trial balance shows an amount, then the Suspense Account has a credit balance. When preparing the final accounts, this balance is shown in the Balance Sheet. If the balance of the Suspense Account is a debit balance, it will be written on the Assets - Receivables' side. If the balance is a credit balance, it will be shown on the 'Capital – Liabilities' side.
The Suspense Account is opened temporarily, and therefore, after finding the errors in the next year, errors are fixed with the help of rectification entries. Here, affected accounts need to be debited or credited, while the other impacts are recorded in the Suspense Account.
Illustration: Received Rs. 100 from 'A' is not posted to his account. In this error, A's account is not credited. Therefore, debit the Suspense Account and credit A's account. In this way, after all errors are fixed, the Suspense Account should not have any balance, meaning it should close automatically. But if there is still a balance in the Suspense Account, it means some errors remain undetected and unrectified, or new errors might have occurred during rectification. Other uses of Suspense Account: Apart from rectifying errors, the Suspense Account is useful for various other purposes, such as:

• When it is not possible to decide the account head (name) or account to be debited or credited, Suspense A/c is used.
• Suspense A/c is used in a journal entry when a trader/businessman does not want to disclose the name of the party.

In simple words: A Suspense Account is a temporary account used to balance the trial balance when it doesn't tally, allowing final accounts to be prepared urgently. Its balance appears in the balance sheet, then it's closed out as errors are found and corrected. It is also useful when the proper account for a transaction is unclear or when a party's name needs to remain private.

Exam Tip: Remember that a Suspense Account is purely a temporary measure. Its ultimate purpose is to facilitate the location and correction of errors, leading to its eventual elimination.

 

Question 5. Pass necessary rectification entries to rectify the following journal entries written by Ishwarlal:

Answer: Rectification entries for Shri Ishwarlal are presented in the table above. Each entry corrects a specific error in the original journal. These entries ensure that all accounts reflect the correct amounts and classifications, addressing various types of accounting mistakes.
In simple words: The table above shows how to fix Ishwarlal's journal entries. Each line corrects a specific mistake, making sure all the accounts are accurate now.

Exam Tip: For rectification entries, first identify the incorrect entry made, then the correct entry that should have been made, and finally, pass a journal entry to adjust the accounts accordingly.

 

Question 6. At the time of preparing final accounts of Vivek as on 31-3-'15, the following errors are found out. Pass necessary rectification entries to rectify the same.
(1) Rs. 5,000 paid for purchase of a computer is debited to Purchase account at the time of posting from cashbook.
(2) Rs. 4,800 paid for rent to Vedant, an owner of shop, by mistake is debited to his Personal account.
(3) Goods of Rs. 9,000 are completely burnt by fire and insurance company has accepted a claim at 40 % for the same, which is unrecorded by mistake.
(4) Rs. 1,200 paid for brokerage is posted twice in Brokerage A/c.
(5) Rs. 1,00,000 incurred for extension of building, by mistake, is debited to repairing expense account.
(6) Rs. 560 paid for general expense is posted to that account as Rs. 650.
(7) Rs. 720 received towards interest is posted to interest account on debit side.
(8) A machinery of Rs. 20,400 is sold for Rs. 22,000. It is recorded in sales book by Rs. 22,000.
(9) Total of bills payable book is undercast by Rs. 300.
(10) In March 2015, discount received and discount paid are Rs. 3,400 and Rs. 3,600 respectively. But by mistake they are recorded on their opposite sides.
Answer: Rectification Entries of Shri Vivek

In simple words: The table provides the necessary entries to correct the various accounting errors found in Vivek's financial records. These corrections ensure that the accounts accurately reflect the business's activities as of the end of the financial year.

Exam Tip: Pay close attention to whether an error affects only one account or two accounts, as this determines if a rectification journal entry is required or if it can be corrected directly in the ledger.

 

Question 7. Trial balance of Shri Marmik as on 31-3-'15 does not tally and therefore a difference of Rs. 1,440 is credited to Suspense account. The following errors are detected after final accounts are prepared :
(1) Rs. 6,490 received from Paresh is posted as Rs. 450 on the debit side of his account.
(2) Rs. 3,560 paid for repairing expenses were posted on the debit side of machinery account as Rs. 1,560.
(3) Discount of Rs. 250 given by Palak is credited to his account as well as discount received account.
(4) Rs. 4,570 paid to Sureshbhai is debited to Maheshbhai's account as Rs. 2,570.
(5) Total of purchase book is undercast by Rs. 1,000.
(6) Purchase of furniture of Rs. 3,670 debited to purchase account.
To rectify the above errors, pass necessary rectification entries and prepare Suspense account. At the end of the year 2015, if profit and loss account discloses a profit of Rs. 78,600. Find out the correct profit after the rectification of errors.
Answer: Rectification Entries of Shri Marmik

Suspense Account


Rectified Corrected Profit:

In simple words: The provided tables show the corrections made to Shri Marmik's accounts, including the rectification entries, the final Suspense Account, and the calculation of the adjusted profit after all errors are fixed for the year 2015.

Exam Tip: When correcting errors after preparing final accounts, carefully consider which errors impact the Profit and Loss Account and require adjustment to the reported profit, and which only affect balance sheet items.

 

Question 8. Trial balance of Shri Dinesh as on 31-3-'15 does not tally. The difference is transferred to Suspense account in order to get it tallied, which is as under:

The following errors are detected after the final accounts are prepared:
(1) Rs. 26,000 received from Dev is posted on the debit side of his account.
(2) Total of sales book is overcast by Rs. 12,000.
(3) Personal expense of Rs. 14,000 is debited to Sundry expenses account.
(4) Goods of Rs. 14,000 purchased from Dev are recorded correctly in purchase book but while posting the same were debited to Dev's account.
(5) Salary paid to Jignesh Rs. 28,000 is debited to his personal account.
(6) Opening balance of Rs. 32,000 of Manisha, debtor's account, is omitted to be carried down. Give necessary rectification entries to rectify the above errors. Prepare Suspense account and the rectified trial balance.
Answer: To rectify the given errors for Shri Dinesh and prepare the Suspense account and rectified trial balance, specific journal entries are required for each error. These entries will correctly adjust the affected accounts, moving amounts from incorrect accounts to correct ones, or recording omitted transactions. The Suspense account will be used to track the cumulative effect of these one-sided errors. Finally, a new trial balance will be prepared to ensure all accounts are balanced and rectified.
In simple words: For Shri Dinesh's accounts, you need to make special journal entries to fix each mistake listed. These fixes will adjust the Suspense account and help create a correct, balanced trial balance.

Exam Tip: When errors are identified after the trial balance is prepared and transferred to a Suspense Account, remember that rectification entries involving the Suspense Account affect only one side of an error.

 

Question 8. Trial balance of Shri Dinesh as on 31-3-'15 does not tally. The difference is transferred to Suspense account in order to get it tallied, which is as under:

The following errors are detected after the final accounts are prepared:
(1) Rs. 26,000 received from Dev is posted on the debit side of his account.
(2) Total of sales book is overcast by Rs. 12,000.
(3) Personal expense of Rs. 14,000 is debited to Sundry expenses account.
(4) Goods of Rs. 14,000 purchased from Dev are recorded correctly in purchase book but while posting the same were debited to Dev's account.
(5) Salary paid to Jignesh Rs. 28,000 is debited to his personal account.
(6) Opening balance of Rs. 32,000 of Manisha, debtor's account, is omitted to be carried down. Give necessary rectification entries to rectify the above errors. Prepare Suspense account and the rectified trial balance.

Answer:

Journal Proper of Shri Dinesh

Suspense Account

Rectified Trial Balance of Shri Dinesh as on 31-3-'15

Explanation:

• (1) Accounts with an asterisk mark have changed amounts after errors were corrected.
• (2) Manisha's new account has been added.
• (3) Dev's A/c's debit balance is now converted into a credit balance.
• (4) After all errors are rectified, the Suspense Account closes, so its balance is no longer shown in the new rectified trial balance.

In simple words: After fixing the mistakes, some account balances changed, Manisha's account was added, Dev's account balance flipped, and the Suspense Account now shows no balance because all errors are corrected.

Exam Tip: When rectifying errors, always ensure that each error is addressed individually and that the final trial balance remains balanced after all adjustments.

 

Question 9. Write rectification entries for the errors found in the books of Priyansh:
(1) Goods purchased of Rs. 3,000 from Chiranshi is recorded correctly in the purchase book. But posting is omitted in her account.
(2) Goods sold to Tajagna Rs. 5,000 is correctly recorded in the sales book, but her account is posted twice.
(3) Rs. 500 received from Vaidehi is posted to her account by Rs. 50.
(4) Rs. 2,500 received from Ayush is correctly recorded in the cashbook, but Rs. 500 has been debited to his account.
(5) Opening balance of a debtor, Keval, Rs. 5,100 is carried forward on the credit side.
(6) Rs. 2,500 paid to a creditor, Zeel is debited to her account by Rs. 500 while posting from cashbook.
(7) Opening balance of machine account Rs. 54,000 is recorded as Rs. 45,000.
(8) Credit balance of bank loan account Rs. 7,500 is omitted to be recorded in trial balance.
(9) Balance of rent paid Rs. 860 is recorded as credit balance by Rs. 680 in trial balance.

 

Question 10. Total of sales return book undercast by Rs. 500.

Answer:

Journal Proper of Shri Priyansh

In simple words: Each error requires a specific adjustment, often by writing the correct amount on the appropriate side of the related account. Some errors might not need a journal entry but instead require direct correction in the ledger or trial balance.

Exam Tip: For rectification entries not requiring a journal entry, clearly state how the correction should be made in the ledger or trial balance by noting the account, side, and amount.