Accounting Error Expenses Recorded to Other Account

 

Two sided error before preparing trial balance

When an error affects two sides, it is known two sided errors.

This type of error needs journal entry to rectify.

Such error affects two side, debit and credit.

Double entry system of bookkeeping is applied for this error.

Procedures for two sided errors before preparing trial balance are given below:

Step 1:       write correct entry of the transaction,

Step 2:       write wrong entry of the transaction,

Step 3:       write correct entry as it is,

Step 4:       change wrong entry (debit entry to credit and credit entry to debit),

Step 5:       find out rectified journal entry.

 

Expenses wrongly recorded to other expenses

Sometimes one expense wrongly recorded to name of other expense.

It is due to hurry in work or bookkeeper does not know the actual account heading to record.

 

PROBLEM: 2A

Following is extracted data before preparing trial balance:

General expenses paid of $/₹/Rs 3,000 have been debited to commission paid account.

Required: Rectified journal entry

 

Given and working note:

Step 1,				÷	Step 2,
Correct entry					Wrong entry
General expenses                To Cash	Dr	3,000	3,000		Commission paid           To Cash	Dr	3,000	3,000

Again, correct entry just copy and paste but wrong debit entry credited and wrong credit entry debited

Step 3,					Step 4,
Correct entry				x	Wrong entry
General expenses                To Cash	Dr	3,000	3,000		Cash           To Commission paid	Dr	3,000	3,000

Step 5,

Rectified Journal Entry

Date	Particulars		LF	Amount Dr	Amount Cr
	General expenses account           To Commission paid account (Being- wrong entry, now rectified)	Dr		3,000	3,000

 

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PROBLEM: 2B

Extracted data before preparing trial balance is:

Discount allowed $/₹/Rs 4,000 was credited to as discount received.

Required: Rectified journal entry

 

Given and working note:

Step 1,				÷	Step 2,
Correct entry					Wrong entry
Discount allowed                  To Cash	Dr	4,000	4,000		Cash           To Discount received	Dr	4,000	4,000

Again, correct entry just copy and paste but wrong debit entry credited and wrong credit entry debited

Step 3,					Step 4,
Correct entry				x	Wrong entry
Discount allowed                  To Cash	Dr	7,000	7,000		Discount received           To Cash	Dr	4,000	4,000

Step 5,

Rectified Journal Entry

Date	Particulars		LF	Amount Dr	Amount Cr
	Discount allowed account Discount received account              To Cash account (Being- wrong entry, now rectified)	Dr Dr		4,000 4,000	8,000

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PROBLEM  AND  ANSWER

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

Basic Problem: 2

Expenses wrongly recorded to other expenses

Following extracted information is given to you (before preparation trial balance):

(a) General expenses of Rs 10,000 have been debited to commission paid account.

(b) Wage paid of Rs 7,500 paid for has been wrongly debited to salaries account.

(c) Rs 3,000 drawn by the owner for his personal use has been debited to general expenses

(d) House rent paid Rs 15,000 wrongly debited to commission paid account.

(e) Discount allowed Rs 3,000 was credited to as discount received.

(f) Commission paid in cash to Santosh was credited as commission received Rs 5,000.

(g) Purchase of computer print paper of Rs 2,275 has been recorded as purchase account

(h) Goods distributed as free sample Rs 2,750 recorded as cash sales Rs 2,570.

Required: Rectified journal entries

[Answer: given in the question]

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