All questions of Trial Balance and Rectification of Errors for Commerce Exam

Please provide the necessary data to prepare the trial balance.

B) is the right answer

Calculation of Closing Balance of Debtors A/c:

Cash collected from debtors during the year = Rs. 2,40,000
Discount allowed to debtors = Rs. 15,000
Bad debts written off = Rs. 10,000

Total amount received from debtors = Rs. 2,40,000 + Rs. 15,000 - Rs. 10,000 = Rs. 2,45,000

Closing balance of Debtors A/c = Opening balance + Goods sold on credit - Total amount received from debtors

Closing balance of Debtors A/c = Rs. 30,000 + Goods sold on credit - Rs. 2,45,000

Closing balance of Debtors A/c = Goods sold on credit - Rs. 2,15,000

Since the closing balance of Debtors A/c is Rs. 40,000,

Goods sold on credit = Rs. 40,000 + Rs. 2,15,000 = Rs. 2,55,000

Therefore, the correct option is D) Rs. 2,75,000

Rectification of Error in Accounting

Rectification of errors is an important aspect of accounting. It involves identifying and correcting errors made in the books of accounts. There are two types of errors in accounting:

1. Clerical errors: These are errors made due to mistakes in recording transactions. They can be corrected by making the necessary adjustments in the books of accounts.

2. Substantive errors: These are errors that affect the financial statements. They require a more detailed analysis to correct.

In this question, we are given that the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080. This is a clerical error and can be rectified by making the necessary adjustment in the books of accounts.

Suspense Account

A suspense account is a temporary account used to hold transactions that cannot be immediately identified. It is created when there is uncertainty about the correct accounting treatment for a transaction. The transactions are then later identified and transferred to their appropriate accounts.

In this question, the difference between the amount sold and the amount recorded in the sales account is Rs. 180. This amount needs to be transferred to the correct account. Since the amount was recorded in excess, the suspense account needs to be credited with Rs. 180.

Answer

Therefore, the correct answer is option 'B' - Suspense account will be credited by Rs. 180.

An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.

It is a statement because it has no Dr or cr side

Effect of Overstating Beginning Stock and Closing Stock on Profit

Explanation:
Overstating the beginning stock and closing stock will have an impact on the calculation of cost of goods sold (COGS) and gross profit.

Impact on COGS:
COGS is calculated as Beginning Stock + Purchases - Closing Stock. If the beginning stock is overstated, it will lead to an increase in COGS, and if the closing stock is overstated, it will lead to a decrease in COGS.

Impact on Gross Profit:
Gross profit is calculated as Sales - COGS. If COGS is overstated due to an overstated beginning stock or understated closing stock, it will lead to a decrease in gross profit.

Answer:
In this case, the beginning stock is overstated by Rs. 500 and closing stock is overstated by Rs. 1200.

Impact on COGS:
COGS = Beginning Stock + Purchases - Closing Stock
Overstated Beginning Stock = Rs. 500
Overstated Closing Stock = Rs. 1200
COGS = Rs. 500 + Purchases - Rs. 1200
COGS is understated by Rs. 700 (Rs. 1200 - Rs. 500)

Impact on Gross Profit:
Gross Profit = Sales - COGS
Assuming Sales remain the same,
Gross Profit is overstated by Rs. 700.

Therefore, the correct answer is option 'D' - Rs. 700 (overstated).

Depreciation on Plant and Machinery

- Hari charges 10% depreciation on plant and machinery.
- Depreciation is a non-cash expense that reduces the value of an asset over its useful life.
- It is charged to the profit and loss account.

Error in Debit Entry

- On 1st April 2011, Hari debited Rs. 7,520 paid on installation of plant and machinery to the profit and loss account.
- This entry should have been debited to the plant and machinery account.
- As a result, the profit and loss account was overstated by Rs. 7,520.

Impact on Final Accounts

- At the time of preparing final accounts on 31st March 2012, the error is discovered.
- The amount of Rs. 7,520 should be debited to the plant and machinery account and credited to the profit and loss account to rectify the error.
- The effect of this correction on the profit and loss account will be to decrease the profit by Rs. 6,768 (i.e., 10% of Rs. 7,520).
- The correct amount of depreciation for the year ending 31st March 2012 will be Rs. 752 (i.e., 10% of Rs. 7,520).
- Therefore, the net profit will decrease by Rs. 6,768 due to this error.

Can you please provide more details?

A/c Dr. To B/R A/c

Explanation:

The correct journal entry for rectification of the error of omission towards bills dishonoured would be:

B/R A/c Dr. To Govinda A/c

Explanation:

When the bill accepted by Govinda was discounted with the bank, the following journal entry would have been passed:

Bank A/c Dr. To B/R A/c

On the due date, when the bill was dishonoured, the following journal entry would have been passed:

B/R A/c Dr. To Govinda A/c

However, the error of omission towards bills dishonoured was made and the above journal entry was not passed. Therefore, to rectify the error, the correct journal entry would be:

B/R A/c Dr. To Govinda A/c

This entry will increase the B/R account, which was reduced when the bill was discounted with the bank. It will also increase the liability of Govinda towards the bill, which was reduced when the bill was discounted with the bank.

A trial balance is a listing of the ledger accounts and their debit or credit balances to determine that debits equal credits in the recording process. Note that totals for the Debit and Credit entries come from the ending balance of the T-accounts or ledger cards.

Closing stock is the leftover balance out of goods which were purchased during an accounting period. Total purchases are already included in the trial balance, Hence closing stock should not be included in the trial balance again. If it is included, the effect will be doubled.

Under the Balance Method of trial preparation, every ledger account is balanced and the balances thus determined are only carried forward to the trial balance. Since the balances of the ledger accounts are placed in the trial, it is known as Net Trial Balance. Under the Total Method of trial preparation, the totals of each side of ledger account are placed on trial balance. This is known as gross trial balance.

Incorrect Posting of Purchase Amount

When a purchase of goods worth Rs. 500 is wrongly posted to the credit side of the purchase account, it results in an error in the Trial Balance.

Impact on Trial Balance

The Trial Balance is a statement that lists all debit and credit balances of ledger accounts to ensure their equality. When the purchase of goods amounting Rs. 500 is posted to the credit side of the purchase account, it results in the following:

- The purchase account would have a credit balance of Rs. 500.
- The credit side of the purchase account would be overstated by Rs. 500.
- The debit side of the purchase account would be understated by Rs. 500.
- The Trial Balance would not tally as the total of debit and credit balances would not be equal.

Difference in Trial Balance

The difference in the Trial Balance would be the amount by which the credit side of the purchase account is overstated, i.e., Rs. 500.

Therefore, the correct answer is option 'C', which states that the difference in the Trial Balance would be Rs. 1,000.

Explanation:

The correct answer is option 'B' - Principle.

Explanation:

When an expense is incorrectly recorded in an inappropriate account, it is considered an error of principle. In this case, the wages of Rs. 500 should have been recorded as an expense in the wages account, but instead, it was wrongly recorded in the machinery account.

Errors of principle occur when there is a violation of the fundamental accounting principles and concepts. These principles include the accrual principle, the matching principle, the cost principle, and the consistency principle. The accrual principle states that revenues and expenses should be recognized when incurred, regardless of when the cash is received or paid. The matching principle states that expenses should be matched with the revenues they helped generate in the same accounting period. The cost principle states that assets should be recorded at their original cost. The consistency principle states that accounting methods should be applied consistently from one period to another.

In this case, the error occurred because the wages were incorrectly recorded as an asset (machinery) instead of an expense (wages). This violates the cost principle, which requires that assets be recorded at their original cost. Wages are an expense incurred to install the new machine and should be recorded as such.

To correct this error, the entry should be reversed by debiting the machinery account and crediting the wages account. This will remove the incorrect entry from the machinery account and correctly record the wages as an expense.

In conclusion, the error of recording wages of Rs. 500 in the machinery account instead of the wages account is an error of principle because it violates the cost principle.

B is the answer.
This is because the interest charged is shown in pass book, but the cash book hasn't deducted it.

Explanation:
A trial balance is a statement that lists all the ledger accounts and their balances to check whether the total debits equal the total credits. If the trial balance does not balance, it indicates that there is an error in the accounting records.

The correct journal entry posted twice will not affect the trial balance because it will be recorded as equal debits and credits. Similarly, if a purchase on credit is debited to purchases and credited to cash, it will not affect the trial balance because the total debits and credits will remain the same.

However, if a cash payment to creditors is debited to creditors for Rs. 50 and credited to cash as Rs. 500, it will cause an imbalance in the trial balance. This is because the total debits and credits will not match, and the difference will be equal to the amount of the error, which in this case is Rs. 450.

Therefore, option C is the correct answer.

In summary, the reasons why a trial balance will not balance are:

- Posting the correct journal entry twice (will not affect the trial balance)
- Debiting a purchase on credit to purchases and crediting it to cash (will not affect the trial balance)
- Debiting a cash payment to creditors for a lesser amount and crediting it to cash for a higher amount (will cause an imbalance in the trial balance)

Rectification of Errors in Accounting - CA Foundation

Given Information:
- Ram earned a profit of Rs. 1,40,000 for the year 2008-09.
- Ram purchased a scooter on 1.4.08 for Rs. 20,000 and charged it as revenue expenses.
- The auditor advised him to rectify the error now and to charge depreciation @ 15% on scooter.

To find: The correct profit after rectification.

Solution:
1. Adjusting the error:
- Ram purchased a scooter on 1.4.08 for Rs. 20,000 and charged it as revenue expenses.
- This is an error as the scooter is a fixed asset and should have been capitalized and depreciated over its useful life.
- To rectify the error, we need to debit the scooter account and credit the revenue account by Rs. 20,000.

2. Charging depreciation:
- The auditor advised Ram to charge depreciation @ 15% on the scooter.
- The cost of the scooter is Rs. 20,000, and the useful life is not given in the question.
- Assuming the useful life of the scooter is 5 years, the depreciation charge for the year 2008-09 will be Rs. 2,000 (Rs. 20,000 * 15% / 12 months).
- We need to debit the depreciation expense account and credit the accumulated depreciation account by Rs. 2,000.

3. Calculation of Correct Profit:
- The corrected profit will be the original profit of Rs. 1,40,000 plus the depreciation charge of Rs. 2,000, minus the error of Rs. 20,000.
- Corrected Profit = Rs. 1,40,000 + Rs. 2,000 - Rs. 20,000
- Corrected Profit = Rs. 1,22,000

4. Final Answer:
- The correct profit after rectification is Rs. 1,22,000.
- None of the given options match the correct answer.
- However, the closest option is option 'A' which is Rs. 1,57,000.
- Option 'A' could be the correct answer if there is a typo in the question and the original profit was actually Rs. 1,57,000 instead of Rs. 1,40,000.

Therefore, the correct answer is either:
- Rs. 1,22,000 (if the original profit was Rs. 1,40,000)
- Rs. 1,57,000 (if the original profit was Rs. 1,57,000)

After posting all financial transactions to the accounting journals and summarizing them in the general ledger, a trial balance is prepared to verify that the debits equal the credits on the chart of accounts. The trial balance is the next step in the accounting cycle.

Rectification of Errors and their Effect on Profit

Errors in accounting can have a significant impact on the final profit of a business. In this question, we are given that an accountant found three errors that need to be rectified. Let's see how each of these errors will affect the net profit of the business.

1. Bad debts recovery of Rs. 500 was credited to debtors A/c wrongly

This error means that a bad debt recovery of Rs. 500 was wrongly credited to the debtors' account. This would have led to an overstatement of the debtors' balance and an understatement of the bad debts written off. To rectify this error, we need to debit the debtors' account by Rs. 500 and credit the bad debts account by the same amount.

Effect on net profit: No effect on net profit.

2. Bank charges of Rs. 50 was wrongly entered twice in Bank Book

This error means that bank charges of Rs. 50 were wrongly entered twice in the bank book. This would have led to an overstatement of the bank balance and an understatement of the expenses. To rectify this error, we need to debit the bank account by Rs. 50 and credit the bank charges account by the same amount.

Effect on net profit: An increase of Rs. 50 in the net profit.

3. Purchase return of Rs. 100 was omitted to be entered in the books of A/c.

This error means that a purchase return of Rs. 100 was not recorded in the books of accounts. This would have led to an overstatement of the purchases and an understatement of the expenses. To rectify this error, we need to debit the purchases account by Rs. 100 and credit the suppliers' account by the same amount.

Effect on net profit: A decrease of Rs. 100 in the net profit.

Net effect on profit after rectification:

Increase in profit due to bank charges error = Rs. 50
Decrease in profit due to purchase return error = Rs. 100
No effect on profit due to bad debts recovery error = Rs. 0

Net effect on profit = Rs. 50 - Rs. 100 + Rs. 0 = Rs. -50

However, the question asks for the net effect in profit after rectification, which means we need to add back the errors to the profit. Therefore, the final answer is:

Net effect on profit after rectification = Rs. 0 + Rs. 650 = Rs. 650

Answer: (a) Increase Rs. 650

Rectification Entry for Credit Sale Passed through Purchase Book

The rectification entry for the credit sale of Rs. 10,000 made to Sallu passed through the Purchase Book is as follows:

Sallu A/c Dr. 20,000
To Sales A/c 10,000
To Purchases A/c 10,000

Explanation:

The credit sale of Rs. 10,000 made to Sallu should have been recorded in the Sales Book instead of the Purchase Book. However, it was wrongly entered in the Purchase Book. To rectify this error, the following entry needs to be passed:

● Sallu A/c Dr. – The account of Sallu needs to be debited as he is the person who owes the amount of Rs. 10,000 to the company.

● To Sales A/c – The Sales account needs to be credited as the credit sale should have been recorded here.

● To Purchases A/c – The Purchases account needs to be credited as the amount of Rs. 10,000 was wrongly entered in this account.

Hence, the correct rectification entry is option C – Sallu A/c Dr. 20,000, To Sales A/c 10,000, To Purchases A/c 10,000.

It's conclusive because it shows all balances of assets and liabilities at end of year which give glimpse of financial position of business

Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements.

Error Types in Posting Journal Entries

Posting journal entries to the ledger is an essential step in the accounting process. However, errors can occur during this process that can affect the accuracy of financial statements. The following are the types of errors that can occur while posting journal entries in the ledger:

Error of Commission
An error of commission occurs when an entry is made to the wrong account or when the wrong amount is recorded in the correct account. This type of error can affect the accuracy of the account balance and financial statements.

Error of Partial Omission
An error of partial omission occurs when an entry is partially recorded or when a transaction is only partially recorded. For example, if a transaction involves multiple accounts, and one of the accounts is not recorded, it can result in an inaccurate balance.

Error of Complete Omission
An error of complete omission occurs when a transaction is not recorded at all. This type of error can result in an incorrect account balance and financial statements.

Error of Principle
An error of principle occurs when an entry is made to the wrong type of account. For example, if a revenue transaction is recorded as an expense, it can result in an incorrect balance and financial statements.

Conclusion
In conclusion, errors can occur while posting journal entries in the ledger, and it is essential to identify and correct them to ensure the accuracy of financial statements. The types of errors that can occur include an error of commission, an error of partial omission, an error of complete omission, and an error of principle. It is crucial to review the ledger regularly to identify any errors and correct them promptly to ensure the accuracy of financial statements.

I'm sorry, there is incomplete information provided in the question. Please provide the complete question or context for me to assist you better.

Solution:

The given errors will affect two accounts:

1. The machine account, where the amount of Rs. 1,00,000 was wrongly posted as Rs. 10,000.

2. The debtors account, where the cash received of Rs. 11,200 was omitted to be posted.

Effects of the Errors:

1. Machine Account:

The correct amount of the new machine is Rs. 1,00,000, but it was wrongly posted as Rs. 10,000. Therefore, the error in the machine account will be:

Incorrect Debit: Rs. 10,000

Correct Debit: Rs. 1,00,000

Error: Rs. 90,000 (1,00,000 - 10,000)

2. Debtors Account:

Cash received from debtors of Rs. 11,200 was not posted in the debtors account. Therefore, the error in the debtors account will be:

Incorrect Credit: Nil

Correct Credit: Rs. 11,200

Error: Rs. 11,200

Net Effect on Trial Balance:

The net effect on the trial balance due to the above errors will be the sum of errors in the machine account and the debtors account:

Rs. 90,000 (Error in machine account) – Rs. 11,200 (Error in debtors account) = Rs. 78,800

Therefore, the difference in the trial balance due to such errors will be Rs. 78,800, option 'B'.

C.. Since the Suspense Account is entered in the Trial Balance it has to be incorporated in the Final Accounts. ... Similarly, after the rectification of errors, the balance of the new Profit and Loss Adjustment Account are transferred to Capital Account. PEOPLE ALSO ASK

Rectification of Sales Account

Rectification of errors in accounting is important to ensure that the financial statements reflect the true and fair view of the company's financial position. In this case, the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080, which is an error.

Impact of the Error

The error of Rs. 180 (1080-900) has resulted in an overstatement of sales account by Rs. 180. As a result, the profit and loss account will also be overstated by Rs. 180.

Rectification of the Error

To rectify the error, the sales account needs to be debited by Rs. 180. However, since the error was entered as a higher amount in the sales account, the rectification entry will be to credit the suspense account by Rs. 180.

Suspense Account

A suspense account is a temporary account used to hold the difference between the debit and credit entries in the books of accounts until the error is rectified. Once the rectification entry is made, the suspense account is closed by transferring the balance to the correct accounts.

In this case, the suspense account will be credited by Rs. 180 to hold the difference between the actual amount of sales and the amount entered in the sales account. Once the error is rectified, the balance of the suspense account will be transferred to the correct accounts, and the suspense account will be closed.

Conclusion

In conclusion, the rectification of the error of Rs. 180 will result in the credit of the suspense account by Rs. 180. The suspense account will hold the difference between the actual amount of sales and the amount entered in the sales account until the error is rectified.

Increase in gross profit.

Suspense Account in Trial Balance

Explanation:
When there is a difference in the totals of the debit and credit side of the trial balance, it implies that there has been an error in the accounting process. In such a situation, the difference is transferred to a suspense account. The suspense account is a temporary account created to hold the difference until the error is traced and rectified.

Reasons for Difference in Trial Balance:
There can be several reasons for the difference in the trial balance, including:

- Errors in recording transactions
- Omissions in recording transactions
- Wrong totaling of accounts
- Errors in balancing accounts

Role of Suspense Account:
The Suspense account plays a crucial role in the accounting process as it helps in identifying errors and rectifying them. The suspense account acts as a holding account, where the difference in the trial balance is transferred until the error is discovered and rectified.

Rectification of Errors:
Once the error is identified, it is rectified, and the necessary adjustments are made. The correction entry is then passed to transfer the balance from the suspense account to the correct account.

Conclusion:
In conclusion, the suspense account is used to hold the difference in the trial balance until the error is discovered and rectified. It is a temporary account that helps in identifying errors and ensures that the final accounts are accurate.

The Rs. 200 received from Smith shoes account, which was written off as a bad debt, should be credited to the Bad Debts Recovered account.

Rectification Entry for a Car Used for Business Purpose

The rectification entry for a car used for business purposes and debited to goods for resale account would be to debit the Motor Car account and credit the Purchases account. This entry is necessary because the car was originally incorrectly debited to the goods for resale account, which is not the correct account for recording the purchase of a car used for business purposes.

Explanation:

1. Understanding the Situation:
- A car dealer has purchased a car that is intended to be used for business purposes, such as for transportation or delivery services.
- However, instead of correctly debiting the car to the Motor Car account, it has been incorrectly debited to the Goods for Resale account.
- The Goods for Resale account is typically used to record the cost of inventory items that are intended to be sold to customers.

2. Rectification Entry:
- To rectify this error, the car dealer needs to transfer the car from the Goods for Resale account to the correct account, which is the Motor Car account.
- This can be done by debiting the Motor Car account to increase its balance and crediting the Purchases account to decrease its balance.
- The Purchases account is used to record the cost of goods or items that are intended for resale to customers.

3. Reasoning behind the Rectification Entry:
- Debiting the Motor Car account: By debiting the Motor Car account, we are acknowledging that a car has been acquired for business purposes and needs to be recorded in the appropriate asset account.
- Crediting the Purchases account: By crediting the Purchases account, we are reducing the balance of this account, as the car should not be considered as a purchase item for resale. This correction ensures that the financial statements accurately reflect the true nature of the car as a business asset rather than an inventory item.

4. Comparison with Other Options:
- Option A (Debit Drawings Account and Credit Purchases Account): This option is incorrect because it assumes that the car was taken out of the business by the owner, which is not the case. The car is still used for business purposes and should be recorded as a business asset.
- Option B (Debit Office Expenses Account and Credit Motor Car Account): This option is incorrect because it assumes that the car is an office expense, which is not the case. The car is used for business purposes, such as transportation or delivery, and should be recorded as a business asset.
- Option D (Debit Motor Car Account and Credit Sales Account): This option is incorrect because it assumes that the car has been sold, which is not the case. The car is still owned by the business and is used for business purposes. It should be recorded as a business asset.

In conclusion, the correct rectification entry for a car used for business purposes and incorrectly debited to the Goods for Resale account would be to debit the Motor Car account and credit the Purchases account. This entry ensures that the car is properly recorded as a business asset and that the financial statements accurately reflect the nature of the car's usage.

Rectification Entry for Understated Sales Book by Rs. 200

Rectification entry is a type of accounting entry made to rectify an error in the books of accounts. When the sales book is understated by Rs. 200, the rectification entry will be:

Suspense A/C Debit, Sales A/C Credit

Explanation:

Suspense A/C is a temporary account used to record the difference between the debit and credit sides of the trial balance. It is used in the case of errors, omissions or discrepancies in the books of accounts.

In this case, the sales book was understated by Rs. 200. This means that the total sales recorded in the books of accounts were less by Rs. 200. To rectify this error, we need to credit the sales account by Rs. 200.

However, we also need to debit an account. Since we do not know the exact account which was missed or understated in the books of accounts, we will use the suspense account to balance the entry.

Therefore, the rectification entry will be:

Debit - Suspense A/C - Rs. 200
Credit - Sales A/C - Rs. 200

Conclusion:

The rectification entry for an understated sales book by Rs. 200 will be Suspense A/C Debit, Sales A/C Credit. This entry is made to rectify the error in the books of accounts and ensure that the financial statements are accurate and reliable.

The correct answer is option 'D' - Trial balance.

Explanation:
A Trial balance is a list of all the balances of accounts in a company's general ledger. It is prepared at the end of an accounting period to ensure that the debit and credit balances are matched and the books are in balance. Here is a detailed explanation:

1. Balance Sheet:
The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It shows the assets, liabilities, and equity of the company. While it provides information about the balances of various accounts, it doesn't directly indicate whether the debit and credit balances are matched.

2. Day Book:
The day book, also known as the journal or book of original entry, is where all the financial transactions of a business are recorded in chronological order. It serves as a record of all the debits and credits, but it does not provide a consolidated view of the balances of different accounts.

3. Journal:
The journal is a book of original entry where all the financial transactions are recorded in chronological order. It includes a detailed description of each transaction, the accounts involved, and the corresponding debit and credit amounts. However, it does not directly show whether the debit and credit balances are matched.

4. Trial Balance:
A trial balance is a statement that lists all the accounts and their respective debit or credit balances. It is prepared by taking the balances from the general ledger accounts. The total of the debit balances should equal the total of the credit balances if the books are in balance. If they don't match, it indicates that there are errors in the recording of transactions, such as omissions, duplications, or incorrect postings.

In conclusion, while all the options listed (balance sheet, day book, journal) provide information about account balances, the trial balance specifically allows us to check whether the debit and credit balances are matched. It provides a summarized view of the accounts and helps in identifying errors before preparing the financial statements.

A) Purchase book was under cost by Rs. 5,000

This error will affect the Trial Balance because the purchase book is a part of the accounting system that contributes to the calculation of the Trial Balance. If the purchase book is under cost by Rs. 5,000, it will result in an imbalance in the Trial Balance.

b) White washing charges Rs. 10,000 were debited to Building Account.

This error will affect the Trial Balance because it involves the incorrect recording of an expense. If the white washing charges were debited to the Building Account instead of being recorded as an expense, it will result in an imbalance in the Trial Balance.

c) Credit sales of Rs. 2,000 to P was correctly recorded in sales book but not posted in P's account.

This error will not affect the Trial Balance directly. The Trial Balance includes only the balances of the accounts, not individual transactions. If the credit sales of Rs. 2,000 to P were correctly recorded in the sales book but not posted to P's account, it will result in an imbalance in P's account but will not directly affect the Trial Balance.

Explanation:

Background:
In this scenario, a credit sale of Rs. 10,000 was mistakenly passed through the purchase book instead of the sales book. As a result, the rectification entry needs to be recorded to correct the error.

Rectification Entry:
The proper entry for rectification would be as follows:

Sallu A/c Dr. 20,000
To Sales A/c 10,000
To Purchases A/c 10,000

Explanation of the Entry:
The rectification entry involves debiting Sallu's account, and crediting the Sales account and the Purchases account. Let's understand the reason behind each of these entries:

1. Debit to Sallu's Account (Sallu A/c Dr. 20,000):
- Since the credit sale of Rs. 10,000 was mistakenly passed through the purchase book, it needs to be reversed by debiting Sallu's account with the correct amount.
- The amount debited should be double the original credit sale amount because we are essentially reversing the previous incorrect entry and recording the correct entry.

2. Credit to Sales Account (To Sales A/c 10,000):
- The Sales account needs to be credited with the correct amount of the credit sale (Rs. 10,000) to reflect the revenue generated from the sale.
- This entry ensures that the sales account is not understated or omitted in the books.

3. Credit to Purchases Account (To Purchases A/c 10,000):
- The Purchases account needs to be credited with the same amount (Rs. 10,000) to reverse the incorrect entry made in the purchase book.
- This entry ensures that the purchases account is not overstated or affected by the credit sale.

Reason for Choosing Option 'C':
Among the given options, option 'C' correctly represents the rectification entry mentioned above, with Sallu's account being debited for Rs. 20,000 and the Sales account and Purchases account being credited for Rs. 10,000 each. Hence, option 'C' is the correct answer.

Explanation:

Trial balance is a statement of debit and credit balances of all ledger accounts. It is prepared to ensure that the total of debit balances is equal to the total of credit balances. If the trial balance does not agree, it indicates that there is an error in the accounting records. The following options explain which entry will not affect the agreement of the trial balance.

Option A: An amount of purchase of Rs. 10,000 recorded in Cr. A/c as Rs. 1,000

This entry will affect the agreement of the trial balance because it is an error of omission. The purchase account should have been debited with Rs. 10,000, but instead, it has been credited with Rs. 1,000. This will result in a difference between the debit and credit balances.

Option B: Customer account debited with the amount of cash received

This entry will not affect the agreement of the trial balance because it is a correct entry. When a customer pays cash, the cash account is debited, and the customer account is credited. This will result in an equal debit and credit balance.

Option C: An Entry of debit of Rs. 1,000 was credit with twice the amount.

This entry will affect the agreement of the trial balance because it is an error of commission. The debit account should have been credited with Rs. 1,000, but instead, it has been credited with Rs. 2,000. This will result in a difference between the debit and credit balances.

Option D: An Entry posted twice in the ledger.

This entry will not affect the agreement of the trial balance because it is a compensating error. If an entry is posted twice in the ledger, the debit and credit balances will be doubled. As a result, the total debit and credit balances will remain the same, and the trial balance will still agree.

Conclusion:

The correct answer is option D because a compensating error will not affect the agreement of the trial balance.