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DK Goel Solutions Class 11 Accountancy Chapter 19

Commerce

DK Goel Solutions Class 11 Accountancy Chapter 19

Class 11 DK Goel Solutions Chapter 19 - Rectification of Errors

Rectification of Errors is an interesting part of Accountancy. Its uniqueness as a concept of study makes it very intriguing and students often find it very gripping and look forward to it as an important part of the syllabus for board exams. This chapter talks about various kinds of errors and how we can rectify these.

An accounting error is an unintentional entry error in accounting. When spotted, the error or mistake is often immediately fixed. There are numerous types of errors, the most common accounting errors are human errors /clerical mistakes and errors of accounting principles.

Types of Accounting Errors:

Rectification of Errors in the process of correcting a mistake and making atonement. Error rectification can be broken down into two types. On both sides of an entry, one of the most typical forms of error occurs. This has no bearing on the trial balance and may be corrected with a diary entry.

These errors can happen while posting journal entries to ledger accounts, classifying these accounts, and carrying forward the balance, among other things. In the following part, we'll go over the various forms of these mistakes in further detail.

The nominal account shall not be corrected through the concerned nominal accounts after the Final Accounts have been prepared. While the profits reported in the preceding year differ from the actual profits reported previously. As a result, the Profit and Loss Adjustment Account is used to correct these types of errors.

Only the correcting entries, which are generally related to the items of the Trading and Profit and Loss Account, are made through the Profit and Loss Adjustment Account, which the students must remember. Similarly, the balance of the new Profit and Loss Adjustment Account is moved to the Capital Account when errors are corrected.

When the trial balance refuses to accept one-sided inaccuracies in the books, an accountant places the difference between the debit and credit sides of the trial balance on the shorter side as the Suspense A/c. The balance in the Suspense A/c decreases after locating and correcting the faults and eventually becomes zero. As a result, the Suspense A/C is unclassifiable. This is a temporary account with a debit or credit balance, depending on the circumstances.

When an accountant utilize the Suspense Account to correct one-sided errors, he must follow the steps below:

Determine which account is the source of the issue.
Identifying the excess credit or debit.
The relevant account is debited in the event of a shorter debit or an excess credit in an account. We must credit the equivalent affected account in the event of a short credit or an excess debit in an account.
Then, by debiting or crediting the Suspense A/c, make the relevant journal entry.

Types of Accounting Errors:

There may be different kinds of errors some are as follows:

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Error of Principle:

This occurs when principles of accounting are applied erroneously. For example, an equipment purchase may be posted as an operating expense. The operating expenses are the day-to-day expenses and as a rule, do not include the fixed-asset purchase.

Error of Original Entry:

An error of the original entry occurs when a wrong amount is posted to an account. The error was posted for the wrong amount and also other accounts related to the transaction.

Error of Duplication:

The error of duplication occurs when an entry is added twice, meaning it's debited or credited twice for the same entry.

Compensating Error:

Compensating error is said to have occurred when one error is compensated by an offsetting entry that's also in error.

Error of Commission:

The error of commission is an error that occurs when debit or credit is made to the correct account but the wrong subsidiary account e.g. money received from a customer is credited to the accounts receivable to the wrong customer.

Error of Omission:

An error of omission occurs when an entry is not made or is missed even after a transaction has occurred. This may also occur in case of too many invoices when an invoice gets lost.

Error of Entry Reversal:

The error of entry reversal occurs in case of an entry posted in the wrong direction, meaning a debit is recorded as a credit or vice versa. For example, the cost of goods

sold, which contains raw materials and inventory, is credited instead of debited and finished inventory is debited instead of credited.

Working Notes

The methods of calculation keeping in mind the rules of Rectification Of Errors have been mentioned at the end of each question in DK Goel Accountancy Class 11 Chapter 19 Solutions 2024-25 practical problems. Such step-by-step explanation given in to solving practical questions will help you in adopting a very methodical approach to solving practical Exercise questions.

Preparing from T S Grewal Accountancy Class 11 - Solutions Chapter 19

In addition to the prescribed Accountancy textbook that you must thoroughly read, downloading Class 11 Accounts Chapter 19 practical problems solutions by Vedantu will be of great help. It is a wholesome resource for quick revision and solving numerical questions. The following tips will be helpful for exam preparation:

Writing and practicing helps a lot towards learning the format, you may need to write and practice from Class 11 DK Goel solutions accounting equations regularly to become skilled at solving Accounting Equations.

Refer to DK Goel Class 11 Solutions 2024-25 Chapter 19 numerical with solutions every two days for regular practice.

DK Goel Class 11 Solutions 2024-25 Chapter 19 PDF is easily accessible and is a good resource for quick revision and contains topics like various kinds of errors and their reification with solved numerical examples. DK Goel Class 11 Chapter 19 Solutions 2024-25 for practical questions will help you in understanding the details of the calculations and also how some entries can be rectified in a specific way understanding their origin of errors, once you understand the accountancy rules behind these.

FAQs on DK Goel Solutions Class 11 Accountancy Chapter 19

1. What is the Rectification of errors that influence the trial balance?

Errors that affect the trial balance can arise on any side of the trial balance, and these errors can only be corrected by passing a journal entry and opening a suspense account.

One-sided errors are so named because they only affect one side of the account (either debit or credit). Such inaccuracies can be corrected by adding a note to the account or by forwarding a journal item through the Suspense account.

The rectification procedure is as follows:

Identification of the account that has a problem.

Determine whether the account has a deficiency or an excess.
If a discrepancy arises as a result of an excess of credit and a deficit of debit, debit the account with the difference amount as determined previously.
If there is a discrepancy due to an excess of debit and a lack of credit, credit the account with the difference.
Finally, debit or credit the suspense account to complete the repair.

2. What are books of original entry?

When a businessperson first starts, one of the most important things they do is keep track of their daily transactions. Before being transferred to ledger accounts, these transactions are documented in a book on a timely basis (depending on the nature of their business). An accounting book or journal where all transactions are initially entered is known as a book of original entries. The book of original entry is where all commercial transactions, their details, and descriptions are first recorded.

Original entry books are simply accounting books or journals in which all transactions are initially recorded. The specifics and descriptions of all business transactions are then documented in the original entry book.

3. What aspects of the Trial Balance are unaffected by Rectification of Errors?

These mistakes affect two or more accounts at the same time. As a result, these are two-sided mistakes. We can repair this by entering a journal entry that shows the right debit and credit balances in the accounts. To repair an error, we must reverse the incorrect debit or credit effect and restore the proper debit or credit's effect.

When an account has a short debit or an excess credit, we must debit the account in question. When an account has a short credit or an excess debit, we must credit the account in question.

These errors include full omission of recording an entry in the journal or subsidiary books, erroneous recording of transactions in the books, complete omission of posting, and errors of principle.

4. Which rectification of error does not influence the trial balance?

Inaccuracies that do not affect the trial balance, such as those including errors on both sides of the debit and credit, can be corrected by passing a journal entry. Two-sided errors are errors that have an impact on two accounts at the same time. Errors can occur on both the debit and credit sides of the account, and they must be remedied or rectified by submitting a journal entry to correct the debit and credit. An error can be rectified by reversing the impact of a bad debit or credit entry and restoring the right debit or credit entry.

When there is an excess of credit or a shortage of debit, the account should be debited; similarly, when there is a shortage of credit and an excess of debt, the account should be credited.

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