The Trial Balance of ABC Ltd, as on Dec 31.2002 did not agree. The dif

1.	The Trial Balance of ABC Ltd, as on Dec 31.2002 did not agree. The difference was put to a Suspense Account. During the next trading period, the following errors were discovered : (i) The total of the sales book of one page Rs. 6.531 was carried forward to the next page as Rs. 6,351 . (ii) Goods returned by a customer for Rs. 1,200 but entered in Purchases Return Book. (iii) Personal Car Expenses amounting to Rs. 250 were debited to Trade Expenses. (iv) Sales Return Book was undercast by Rs. 2,750. (v) Rs. 50 discount allowed by a supplier, was wrongly posted to debit side of Discount Account (vi) An item of purchases of Rs. 151 was entered in Purchases Book as Rs. 15 and posted to Supplier's account as Rs. 51. You are required to give journal entries to rectify the errors through Profit & Loss Adjustment Account in a way so as to show the current year's profit or loss correctly.
Answer» $\huge{\fcolorbox{yellow}{pink}{❀Answer:-}}$ There are certain TRANSACTIONS which REQUIRES more clarity or there are some errors which are not rectified before the FINALIZATION of accounts. All such entries are PARKED in a temporary account known as suspense account. Suspense account will be shown in the BALANCE sheet either on asset side or liabilities side, depending on the balance of suspense account.

The Trial Balance of ABC Ltd, as on Dec 31.2002 did not agree. The difference was put to a Suspense Account. During the next trading period, the following errors were discovered : (i) The total of the sales book of one page Rs. 6.531 was carried forward to the next page as Rs. 6,351 . (ii) Goods returned by a customer for Rs. 1,200 but entered in Purchases Return Book. (iii) Personal Car Expenses amounting to Rs. 250 were debited to Trade Expenses. (iv) Sales Return Book was undercast by Rs. 2,750. (v) Rs. 50 discount allowed by a supplier, was wrongly posted to debit side of Discount Account (vi) An item of purchases of Rs. 151 was entered in Purchases Book as Rs. 15 and posted to Supplier's account as Rs. 51. You are required to give journal entries to rectify the errors through Profit & Loss Adjustment Account in a way so as to show the current year's profit or loss correctly.

Answer»

$\huge{\fcolorbox{yellow}{pink}{❀Answer:-}}$

There are certain TRANSACTIONS which REQUIRES more clarity or there are some errors which are not rectified before the FINALIZATION of accounts. All such entries are PARKED in a temporary account known as suspense account.

Suspense account will be shown in the BALANCE sheet either on asset side or liabilities side, depending on the balance of suspense account.

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