GDB dated 18 january to 24 january 2018

[shifa arshad]

Topic to be tested:

• Rectification of errors

Learning Objectives:

• To understand the type of errors and effects of identified errors on trial balance and financial statements

GDB Question:

Mr. Aslam is running his small business under the name of Aslam and Sons. He has recently hired Mr. Anwar as a junior accountant to maintain the books of accounts of his business. Mr. Anwar has little knowledge in accounting. Recently, it has been observed that Mr. Anwar made the following errors in the books of accounts.

 

Cases	Type of error
Case –A: Goods of Rs. 100,000 bought on credit from Mr. Ali but recorded as Rs. 10,000.	?
Case –B: Cash withdrawals from business wrongly debited to the cash account and credited to the drawings account.	?

 

Required:

1. Identify the “type of error” committed by Mr. Anwar under Case-A given above.
2. Identify the “type of error” committed by Mr. Anwar under Case-B given above.
3. What will be the effect of given errors on arithmetical accuracy of trial balance? (Just mention whether the trial balance would be overstated, understated or remains unaffected).
4. Compute the correct amount of Net profit, if net profit before correcting the above errors was Rs. 150,000.

Note: Be concise and avoid unnecessary detail to attempt the given questions.

Important Instructions:

1. Your discussion must be based on logical facts.

2. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
3. Obnoxious or ignoble answer should be strictly avoided.
4. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

[Mrs. Rashid]

I need answer too

[Excuse]

KOi to help kro

[Irfan Ramzan]

Wait for some time.. will provide answer tonight.. InshaAllah...

[pEarl]

i want to discuss that there are many solution which written in case B Reversal of entry but its not type of error?

[MBA Executive]

Gdb Solution Mgt101

1. Error of Original Entry
2. Error of Commission
3. In case 1 trial balance would be understated and in case II trial balance would be unaffected (Not sure )
4. Net profit before correct the error is 150000 and After correct the error 90000 charged to goods so net profit will be 150000-90000=60000

Note : if you found any mistake then correct ur self I m not responsible incase of zero marks. even guide me if i'm wrong.

thankyou

[+ " ℛapunzel]

understated ya overstated...confirm btao koi plz

[pEarl]

AP ne GDB submit krwa diya ha ? 

[Gul shair Ali]

yar is ka solution to send kren jaldi

[+ M.Tariq Malik]

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[+ M.Tariq Malik]

Cases	Type of error
Case –A: Goods of Rs. 100,000 bought on credit from Mr. Ali but recorded as Rs. 10,000.	Error of Original Entry
Case –B: Cash withdrawals from business wrongly debited to the cash account and credited to the drawings account.	Reversal of Entry

 

Required:

1. Identify the “type of error” committed by Mr. Anwar under Case-A given above.
2. Identify the “type of error” committed by Mr. Anwar under Case-B given above.
3. What will be the effect of given errors on arithmetical accuracy of trial balance? (Just mention whether the trial balance would be overstated, understated or remains unaffected).

Ans :   Trail Balance would be overstated…….

1. Compute the correct amount of Net profit, if net profit before correcting the above errors was Rs. 150,000.

Ans: Net profit before 150,000 because 90,000 is less recorded and then we record these 90,000 net profit would be less and become just 60,000 Rs.

[+ ! ! ! ! ! Aks TweeTy ! ! ! ! +]

is this is complete

[+ M.Tariq Malik]

Gdb Solution Mgt101
Error of Original Entry
Error of Commission
In case 1 trial balance would be understated and in case II trial balance would be unaffected (Not sure )
Net profit before correct the error is 150000 and After correct the error 90000 charged to goods so net profit will be 150000-90000=60000
Note : if you found any mistake then correct ur self I m not responsible incase of zero marks