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Solved Examples Part -2 – Rectification of Errors in CA Foundation

Posted on - 03-02-2025

1137702

ca-foundation-accounts

Rectification of Errors

Example -1

Sales Return Omitted from Books

Goods returned by a customer (Mr. Z) worth ₹2,500 not recorded. Rectify.

Solution (Hinglish)

  • Normal entry for Sales Return: “Sales Return A/c Dr. / To Mr. Z A/c.”
  • We do that now as rectification.

Rectification:

Particulars

Debit (₹)

Credit (₹)

Sales Return A/c Dr.

2,500

To Mr. Z A/c

2,500

(Being sales return omitted, now recorded)

Hinglish:

Customer ne goods wapas kiye par humne record nahin kiya. Ab “Sales Return” debit aur “Mr. Z” credit.

Example -2

Purchase Return Treated as Sales Return

Purchase Return of ₹4,000 was wrongly credited to Sales Return A/c. Rectify.

Solution (Hinglish)

  • Correct entry for Purchase Return: “Creditor / Supplier A/c Dr. / To Purchase Return A/c.”
  • We put it in “Sales Return A/c.” So we remove from Sales Return, and put it in Purchase Return.

Rectification:

Particulars

Debit (₹)

Credit (₹)

Purchase Return A/c Dr.

4,000

To Sales Return A/c

4,000

(Being purchase return wrongly credited to sales return)

Hinglish:

Hume “Purchase Return” me credit karna tha, par humne “Sales Return” me kar diya. Ab rectify kar rahe hain: Purchase Return Dr. / Sales Return Cr.

Example -3

Cash Discount Missed in Journal

Company paid ₹20,000 to a supplier, who allowed ₹500 discount. But the entire ₹20,500 was credited to Cash/Bank, ignoring the discount. Rectify.

Solution (Hinglish)

  • We actually paid 20k only, 500 was discount received.
  • If we credited 20,500 to cash, that means we showed we parted with 20,500. But real payment 20k. So we have an extra 500 credited to cash.
  • We must reduce that extra credit to cash and show discount as an income.

Rectification:

Cash/Bank A/c Dr. 500

To Discount Received A/c 500

(Because we originally over credited Cash by 500, we now debit Cash by 500 to fix it, and credit “Discount Received” to record that income.)

Table:

Particulars

Debit (₹)

Credit (₹)

Cash/Bank A/c Dr.

500

To Discount Received A/c

500

(Being discount received omitted, now recorded)

Hinglish:

Over-credit to Cash means humne dikhaya zyada paisa gaya. Actually 500 discount mila, so ab hum Cash ko wapas debit kar rahe hain 500 se, Discount Received credit me daal rahe hain.

Example -4

Freight Paid on New Machinery Debited to Freight A/c

Freight of ₹2,000 on new machinery was debited to Freight A/c (revenue expense) instead of capitalizing to Machinery. Rectify.

Solution (Hinglish)

  • This is an Error of Principle. Should be added to Machinery cost.

Entry:

Particulars

Debit (₹)

Credit (₹)

Machinery A/c Dr.

2,000

To Freight A/c

2,000

(Being freight on new machinery capitalized)

Hinglish:

Naya machinery, uspar freight cost asset me add karni chahiye. Humne galat se expense treat kar diya tha.

Example -5

Cheque Received Entered as Cash

A cheque of ₹10,000 received from Mr. A was recorded in the Cash Column of the Cash Book instead of Bank Column. Rectify.

Solution (Hinglish)

  • We credited Mr. A correctly, but we debited “Cash A/c” instead of “Bank A/c.”
  • So we must remove from Cash and move it to Bank.

Rectification:

Particulars

Debit (₹)

Credit (₹)

Bank A/c Dr.

10,000

To Cash A/c

10,000

(Being cheque incorrectly treated as cash)

Hinglish:

Cheque should go to Bank, but we did cash. So we do “Bank A/c Dr. / To Cash A/c” 10k.

Example -6

Wrong Balancing of Ledger

Rent A/c was overcast by ₹1,000 in the ledger total. Rectify.

Solution (Hinglish)

  • Overcast means we added 1,000 extra in the debit total of Rent.
  • So we remove that 1,000 from Rent A/c by crediting it.

Entry:

Particulars

Debit (₹)

Credit (₹)

No debit needed

To Rent A/c

1,000

(Being rent overcast by 1k, now corrected)

Hinglish:

Overcast means zyada debit ho gaya. Ab hum Rent A/c ko credit karke ghata denge 1,000.

Example -7

Error in Carry-Forward (Purchase Book)

The Purchase Book was undercast by ₹500 in total. Rectify in the ledger.

Solution (Hinglish)

  • Undercast means total kam hua. So Purchases A/c is posted less by ₹500.
  • We must debit Purchases A/c with ₹500 now.

Entry:

Particulars

Debit (₹)

Credit (₹)

Purchases A/c Dr.

500

To (Suspense or Creditor)??

500

(If we know which creditor or if using Suspense for the difference?)

(Often we rectify via Suspense if no specific account identified. But conceptually, “Purchases A/c Dr. 500, To Suspense A/c 500.”)

Hinglish:

Purchase Book me total 500 kam liya, toh purchase side me hum 500 add kar rahe hain by debiting it.

Example -8

Wrong Totalling in Sales Book

Sales Book was overcast by ₹1,500. Rectify.

Solution (Hinglish)

  • Overcast means humne Sales A/c me 1,500 zyada le liya.
  • So we must reduce Sales by 1,500: “Sales A/c Dr. 1,500.”

Entry:

Sales A/c Dr. 1,500

To Suspense A/c 1,500

(If no direct party is known.)

Hinglish:

Sales me 1,500 extra post hua, ab hum “Sales A/c Dr.” 1,500 kar ke usko correct kar denge.

Example -9

Wages Paid Posted as ₹650 Instead of ₹560

Paid Wages ₹560 but posted as ₹650 in Wages A/c. Rectify.

Solution (Hinglish)

  • We over-debited Wages by ₹90 (650 – 560).
  • So we credit Wages A/c ₹90 to fix.

Entry:

Particulars

Debit (₹)

Credit (₹)

No debit needed

To Wages A/c

90

(Being wages over-debited by 90)

Hinglish:

Humne 560 ke badle 650 debit kar diya, 90 extra. Ab Wages ko credit karke remove kar rahe hain 90.

Example -10

Repair of Building ₹3,000 Capitalized to Building A/c

Repair expense (revenue) ₹3,000 was added to Building A/c. Rectify.

Solution (Hinglish)

  • This is an error of principle: building repairs are revenue expense, not capital.
  • So remove from Building (credit) & debit Repairs/Building Repairs A/c.

Entry:

Particulars

Debit (₹)

Credit (₹)

Repairs A/c Dr.

3,000

To Building A/c

3,000

(Being building repairs wrongly capitalized, now corrected)

Hinglish:

Repair is normal expense, not asset. So “Repairs Dr. / Building Cr.” 3k.

Final Hinglish Recap

1. Rectification involves identifying the correct accounts that should have been debited/credited, and reversing the wrong postings.

2. Error of Principle: capital item taken as revenue or vice versa.

3. Error of Commission: correct accounts but wrong amounts or posted to wrong person.

4. Error of Omission: transaction wholly or partially missed.

5. Overcast/Undercast: means arithmetic total zyada (over) ya kam (under).

 
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