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done through Suspense A/c only. The rectification entry 15 Bala A/C Dr. 8.900 Suspense A/C Dr. 900 To Sethu A/C 9,800 le) This transaction involves

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done through Suspense A/c only. The rectification entry 15 Bala A/C Dr. 8.900 Suspense A/C Dr. 900 To Sethu A/C 9,800 le) This transaction involves correction of purchase as well as sales, and hence will affect profit. As the purchases were booked as sales, we will need to cancel sales by debiting and freshly debit purchase. So overall effect on profit will be 3,250 + 3,520 i.e. 6.770. The rectification enry will be: P & L Adjustment A/C Dr. 6.770 To Evan Traders 6,770 (f) if discount is appearing on payment side of cash book, it indicates discount received while making payment and is an item of income. Hence, it will affect profit. The accounting entry will be: Suspense A/C Dr. 1,500 To P & L Adjustment A/C 1,500 08 Illustration 33. You are presented with a trial balance of S Ltd as on 30.06.2013 showing the credit is in exces by 2 415 which was been carried to Suspense Account. On a close scrutiny of the books, the following errors were revealed: a. A cheque of 3,456 received from Sankar after allowing him a discount of 46 was endorsed to Sharma in full settlement for ? 3,500. The cheque was finally dishonored but no entries are passed in the books. b. Goods of the value of 230 returned by Sen were entered in the Purchase Day Book and posted therefrom to Das as 320. C. Bad debts aggregating 505 written off during the year in the Sales Ledger but were not recorded in the general ledger. d. Bill for ? 750 received from Mukherjee for repairs to Machinery was entered in the Inward Invoice Book as 650. e. Goods worth 1.234 Purchased from Mr. Y on 28.6.2013 had been entered in Day Book and credited to him but was not delivered till 5th June 2013. Stock being taken by the purchase on 30.06.2013. The title of the goods was, however, passed on 28.06.2013. f.

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