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Errors may also be committed in subsidiary books, such as purchases book, sales book, purchases return and sales return books. Common errors in the subsidiary books may be categorized as under:

1. Errors of omission-forgetting to record the entire transaction in the subsidiary books.

2. Overcasting in subsidiary books.

3. Undercasting in subsidiary books.

Errors of complete omission can be rectified by passing the correct entry which was omitted to be passed as the old proverb goes. “It is never too late to mend”. For example, if goods ·returned by Mohan were taken into stock but no entry was passed through books, the rectification of the transaction will be to pass the correct entry for return of goods.

Subsidiary books do not have both the debit and credit sides. They simply have either debit or credit balance. The mistakes in subsidiary books are, therefore, restricted to totals only. Sometimes it may be totaled short (undercast) or totalled more (overcast). The mistake can be rectified by taking into consideration the type and nature of subsidiary book. Errors of undercasting and overcasting in the subsidiary books are discussed in detail as under:

 

Purchases Book

It records credit purchases of goods only. Whenever goods are purchased, purchases account is debited. In all cases of purchases, goods come into the business, so purchases account has to be debited. It is an accepted accounting truth that purchases book has a debit balance. Undercasting purchase book will mean that purchases book has been added short or technically debited short the rectification of the error will be done by debiting purchases account. If the purchases book has been overcast, it will mean that it has been totaled more or debited more. For rectification of this error, purchases account will be credited which will reduce the total of the purchases book. The error affects only one account, i.e., purchases account in both the cases of undercasting or overcasting, so the rectification can be made in the following ways:

 

 

 

Illustration 2. Rectify the following errors:

1. Purchases book was undercast by $ 1,000.

2. Purchases book was overcast by $ 100.

Solution. (a) Without raising suspense account

1. Following posting will be made at the debit side of purchases account.

“To undercast of the purchases book” $ 1,000.

2. Following posting will be made at the credit side of the purchases account.

“By overcast of the purchases book” $ 100.

(b) By raising suspense account:

 

I. Purchases A/c

To Suspense A/c

(Being undercasting of purchases book, now rectified)

2. Suspense A/c

To Purchases A/c

(Being purchases book overcast, now rectified)

Dr. 1,000

Dr. 100

1.000

100

 

Sales Book

Sales book records only credit sale of goods. It does not record cash sales of goods or credit sales of assets. Sales account is always credited for sale, so the sales book always shows a credit balance. As the sales book has got only credit side, the mistakes therein are restricted to overcasting or undercasting. In case of undercasting, the total of sales book is short cast or in other words credited short. Its rectification will be to credit sales account or make a posting at the credit side of the sales account. In the same way, overcasting of sales book will mean overcrediting the sales, so for rectification of the error, sales account will be debited to set right the amount excess credited. The mistake of undercasting or overcasting the sales book can be rectified by posting at the debit or credit side of the sales account or by opening suspense account. Rectification is illustrated as under.

 

Illustration 3. Rectify the following errors:

1. Sales book was undercast by $ 150.

2. Sales book was overcast by $ 100.

Solution. Without opening suspense account

1. Following posting will be made at the credit side of sales account.

“By undercast of sales book” $ 150.

2. Following posting will be made at the debit of the sales account.

“To overcast of sales book” $ 100.

By raising suspense account

I. Suspense A/c              Dr. 150

To Sales A/c                                                150

(Being undercasting of sales book, now rectified)

2. Sales A/c                   Dr. 100

To Suspense A/c                                         100

(Being overcasting of sales book, now rectified)

 

Purchases Return or Returns Outward Book

Return of goods, purchased on cred it is recorded in the purchases return book. Purchases book shows a debit balance, so the purchases return book will definitely show a credit balance, because purchases return is entirely reverse to purchases. Undercasting in the purchases return book will mean under crediting or crediting short. In order to rectify the mistake, we shall be crediting purchases return account or returns outward account. In the same way, overcasting in the returns outward book will require purchase return account to be debited. The rectification of error is illustrated as under:

 

Illustration 4. Rectify the following errors:

I. Returns outward book was undercast by $ 1,000.

2. Purchases return book was overcast by $ 100.

Solution. Without raising suspense account

1. Following posting will be made at the credit side of purchases return account.

“By undercast of returns outward book” $ 1000.

2. Following posting will be made at the debit side of the purchases return account.

“To overcast in the purchases return book” $ 100.

By raising suspense account

1. Suspense A/c Dr.

To Purchases return A/c

(Being undercasting of purchases return book, now rectified)

2. Purchases Return A/c

To Suspense A/c

Dr.

(Being purchases return book overcast. now rectified)

1,000

1,000

100

100

 

 

 

Sales Return or Returns Inward Book

Sales return means the return of goods to us by our debtors. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. Error of undercasting in the sales return book is underdebiting it or debiting it with lesser amount. The rectification of this error will require debiting sales returns account. In the same way, we shall be crediting sales return account for overcasting. The mistake of undercasting and overcasting can be rectified without raising suspense account or by opening suspense account.

Rectification of these errors is illustrated as under:

Illustration 5. Rectify the following errors:

1. Sales return book was undercast by $ 100.

2. Returns inward book was overcast by $ 1,000.

Solution. Without raising suspense account

I. Following posting will be made at the debit side of sales return account.

”To undercast of sales return book” $ 100.

2. Following posting will be made at the credit side of sales return account.

“By overcast of sales return book” $ 1,000.

By raising suspense account

l. Returns Inward A/c

To Suspense A/c

(Being returns inward book undercast, now rectified)

2. Suspense A/c

To Returns Inward A/c

(Being returns Inward book overcast, now rectified)

Dr. 100

Dr. 1,000

100

1.000

 

Bills Receivable Book

Bills receivable book records the details of the bills drawn by us on our debtors. The bill is accepted by our debtors. After accepting the bill ‘debtors’ account is replaced by another assets known as bills receivable accounts. It shows a debit balance like other assets. Undercasting bills receivable book in this way will mean writing lesser amount at the debit side, so the error can be rectified by debiting bills receivable account. In the same way, overcasting of the book will require crediting bills receivable account. The mistake can be rectified without raising suspense account or by raising suspense account. Rectification is illustrated as under:

 

 

 

Illustration 6. Rectify the following errors :

1. Bills receivable book was undercast by $ 200.

2. Bills receivable book was overcast by $ 300.

Solution. Without raising suspense account

1. Following posting will be made at the debit side of the bills receivable account.

“To undercast in the bills receivable book” $ 200.

2. Following posting will be made at the credit side of bills receivable account.

“By overcast in the bills receivable book” $ 300.

 

By raising suspense account

I. Bills receivable A/c

To Suspense A/c

(Being bills receivable book undercast. now rectified)

2. Suspense A/c

To Bills receivable A/c

(Being overcasting of bills receivable book, now rectified)

Dr. 200

Dr. 300

200

300

 

Bills Payable Book

 

Bills payable are drawn by our creditors and accepted by us. It is· our liability and has credit balance. Undercasting in the bills payable book will mean cred1ting it with lesser amount, so while rectifying the error bills payable account will be credited. In case of overcasting, bills payable book would have been credited with more amounts, so rectification will require bills payable account to be debited. The error can be rectified without raising suspense account and also by raising suspense account which is illustrated as under:

 

Illustration 7. Rectify the following errors:

1. Bills payable book was undercast by $ 1,000.

2. Bills payable book was overcast by $ 600.

Solution. Without raising suspense account

I. The following posting will be made in case of undercasting at the credit side of bills payable account.

“By undercast in bills payable book” $ 1.000.

2. The following entry will be made at the debit side of bills payable account.

“To overcast in bills payable book” $ 600.

 

By raising suspense account

1. Suspense A/c Dr. 1,000

To Bills payable A/c 1,000

(Being bills payable book undercast, now rectified)

2. Bills Payable A/c Dr. 600

To Suspense A/c 600

(Being bills payable book overcast. now rectified)

 

It should be noted that if errors are located before ledger accounts are closed, rectification will be made without raising suspense account. If errors have been located after trial balance has been prepared and difference placed in the suspense account rectification of errors will be made by opening suspense account.

 

In examination questions, it is not generally mentioned whether errors have been located before preparation of trial balance or after the preparation of trial balance. In such cases, errors are assumed to have been located after the preparation of trial balance and rectification through suspense account is advised. It will be different treatment if students are instructed to rectify errors without raising suspense account.