Question

In: Accounting

The following errors are in the books of Mr. Hilal at end March 2017. The error...

The following errors are in the books of Mr. Hilal at end March 2017. The error committed is provided. Discuss the following for each of the below errors:

  1. The type of error committed; and
  2. Rectification Process (in words) and
  3. Rectify the error (entry)                                                            
  1. Machinery purchased from Mr. Rafiq RO. 8000 was entered into the Purchase book.

Accounts

Dr.

Cr.

Purchases

                      Rafiq

8,000

8,000

                    

  1. Credit sales to Fatima RO. 10,000 is debited wrongly to the account of Sharifa.

Accounts

Dr.

Cr.

Sharifa

                      Sales

10,000

10,000
  1. Cash received from customer RO. 4500, entered as RO 4050.

Accounts

Dr.

Cr.

Cash

                      A/R

4,050

4,050

  1. Goods purchased for Cash RO. 240 posted incorrectly.

Accounts

Dr.

Cr.

Purchases

                      Cash

480

480
  1. Credit sales to Maryam RO. 12000 is debited wrongly to the account of Mana.

Accounts

Dr.

Cr.

Mana

                      Maryam

12,000

12,000

                                                                                                                                                                                                     

Solutions

Expert Solution

i) Type of error : Errors of Principle
Rectification Process : We need to credit Purchase Book and Debit Machinery Account
Rectification Entry :
Particulars Debit Credit
Machinery A/c $   8,000.00
To Purchases $   8,000.00
ii) Type of error : Errors of Commission
Rectification Process : Credit Sharifa and debit Fatima
Rectification Entry :
Particulars Debit Credit
Fatima $ 10,000.00
To Sharifa $ 10,000.00
iii) Type of error : Error of original entry
Rectification Process : Debt Cash and credit A/R by $ 450 ($ 4500 - $ 4050)
Rectification Entry :
Particulars Debit Credit
Cash $      450.00
To Accounts Receivable $      450.00
iv) Type of error : Error of duplication
Rectification Process : Debit Cash and credit Purchase
Rectification Entry :
Particulars Debit Credit
Cash $      240.00
To Purchase $      240.00
v) Type of error : Errors of Commission
Rectification Process : Debit Maryam, credit Mana and Sales
Rectification Entry :
Particulars Debit Credit
Maryam $ 24,000.00
To Sales $ 12,000.00
To Mana $ 12,000.00

ekkarill92 answered 3 years ago
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