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Student
name
ID #
Includes
IGCSE Accounting
Manarat Ahmed
Course Instructor:
Correcting Errors
Correcting Errors | 1
Correcting Errors | 2
Suspense account
A suspense account is an account in the general ledger in which amounts are temporarily recorded
when debit and credit balance of trial balance do not match.
Invoice issued
Credit note issued
Invoice received
Credit note received
X
X
X
(X)
(X)
X
= sales
= sales return/return inwards
= purchase
= purchase return/ return outwards
Exercise Sum # 1
Show the journal entries with narrations necessary to correct the following errors:
Jan 10..A sale of goods 412 to T More had been entered in T Mones account.
Jan 11. The purchase of a machine on credit from J Frank for 619 had been completely omitted from
our books.
Jan 12. The purchase of a computer for 550 had been entered in error in the Office Expenses
account.
Jan 13. A sale of 120 to B Wood had been entered in the books, both debit and credit, as 102.
Jan 14. Commission received 164 had been entered in error in the Sales account.
Jan 15. A receipt of cash from T Blair 68 had been entered on the credit side of the cash book and
the debit side of T Blairs account.
Jan 16. A purchase of goods 372 had been entered in error on the debit side of the Drawings
account.
Jan 17. Discounts Allowed 48 had been entered in error on the debit side of the Discounts Received
account.
Correcting Errors | 3
Jan 18. A sale of 120 to B Wood had been entered in the books, both debit and credit, as 150.
Date
Details
Dr.
Cr.
Exercise Sum # 2
Show the journal entries with narrations necessary to correct the following errors:
Jan 18. Purchases 1,410 on credit from A Ray had been entered in B Roys account.
Jan 19. A cheque of 94 paid for printing had been entered in the cash column of the cash book
instead of in the bank column.
Jan 20.Sale of goods 734 on credit to D Rolls had been entered in error in D Rollos account.
Jan 21.Purchase of goods on credit L Hand 819 entered in the correct accounts in error as 891.
Jan 22. Cash paid to G Boyd 64 entered on the debit side of the cash book and the credit side of
G Boyds account.
Jan 23 .A sale of fittings 320 had been entered in the Sales account.
Jan 24 .Cash withdrawn from bank 200 had been entered in the cash column on the credit side of
the cash book, and in the bank column on the debit side.
Jan 25. Purchase of goods 1,182 has been entered in error in the Furnishings account.
Jan 26. The purchase of a new van for 6,000 was included in the motor vehicle expenses account.
Correcting Errors | 4
Jan 27. The drawings account included 250 for the purchase of fuel which was used to heat the
business offices.
Jan 28. 300 paid by a customer, B Burton Ltd, had been credited to B Strutons account in error.
Jan 29. The water rates on the proprietors private house, 750, has been paid by the business and
debited to the business rent account.
Jan 30 720 included in the wages account was included in the motor expense account.
Date
Details
Dr.
Cr.
Correcting Errors | 5
Exercise sum # 3
Show the journal entries with narrations necessary to correct the following errors:
Feb1.The sales day book had been undercast by 10.
Feb2 .A customers personal account has been correctly credited with 2 discount, but no
corresponding
entry was made in the discount column of the cash book.
Feb3 .Discounts allowed for July, amounting to 70 were credited to discount received account
instead of being debited to the discount account.
Feb4. A debit balance on the account of D Bird, a customer, was undercasted by 10 .
Date
Correcting Errors | 6
Details
Dr.
Cr.
SUSPENSE A/C
Date
Details
Date
Details
Q.Show the effect on trial balance and net profit the transactions from Feb1 Feb-5
caused.
Date
Correcting Errors | 7
Exercise sum #4
Show the journal entries with narrations necessary to correct the following errors:
Feb 6 Discounts allowed during March amounting to 62 were posted to the credit of the discounts
received account.
Feb 7 The sales day book was overcast by 100.
Feb 8 Goods bought on credit from A Supplier for 5 had been posted to his account as 50.
Feb 9 S Kane, a customer, returned goods valued at 10. This had been entered in the sales returns
day book and posted to the debit of the customers account.
Feb 10 The sale on credit of various items of plant and machinery at their book value of 300 had
been recorded in the sales day book.
Feb 11 An item of cash discount allowed 2 had been correctly entered in the cash book but had not
been posted to the account of B Luckwood, the customer.
Feb 12 A new machine costing 70 had been posted to the debit of the repairs to machinery
account.
Feb 13 A credit note for 179 received from a supplier had been posted to the wrong side of his
account.
Feb 14 A cheque for 1,500, being rent received from Atlas Ltd, had only been entered in the cash
book.
Date
Correcting Errors | 8
Details
Dr.
Cr.
SUSPENSE A/C
Date
Details
Date
Details
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Q.Show the effect on trial balance and net profit the transactions from Feb6 Feb-14
caused.
Date
IGCSE JUNE 09
Correcting Errors | 10
After preparing the draft trading and profit and loss account for Aidan Davis for the year
ended
31 March 2009, several errors and omissions have been discovered.
These are:
1. Drawings of 15000 taken from the businesss bank account during the year have been
credited to the bank account but debited to the wages account in error.
2. The balance of 1350 on the account of a debtor, A Patel, who had gone into liquidation
should have been written off as a bad debt.
3. It was decided to create a provision for doubtful debts equal to 2% of debtors as at
31 March 2009. Debtors at the year end totalled 30000 (including the balance stated in
2 above).
4. The purchase of a new vehicle on 1 April 2008, for use in the business, at a cost of 10000
had been posted in error to the purchases account. This item has not been included in the
current depreciation total for the year. Depreciation is provided on motor vehicles on a
25% straight line basis.
5. A rates bill for 600 covering the period 1 January 2009 to 30 June 2009 was paid on
31 December 2008. No adjustment has been made for this in the accounts.
6. An electric bill for 250 was outstanding on 31 March 2009. No adjustment has been
made for this in the accounts.
(a) Prepare journal entries for all the items opposite. Date your entries 31 March 2009
and include suitable narratives.
Date
Details
Debit
Credit
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Correcting Errors | 12
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(b) Prepare the amended trading and profit and loss account for the year ended 31 March
2009. (8)
Details
(c) Using the adjustments for accruals and prepayments as examples, evaluate the
importance of the prudence concept in the preparation of the final accounts.
(5)
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IGCSE , May 11
The following trial balance has been prepared by a trainee accounting clerk from the
books of Harsha Patel.
Correcting Errors | 15
Details
Bank balance
Debit
59000
Capital
Credit
87900
Carriage outwards
350
Closing stock*
3241
Drawings
27500
30000
Opening stock
2623
2500
Purchases
38950
7500
Sales
65400
10000
218
(a) Prepare a corrected version of Harshas trial balance, with an amended figure for
the suspense account.
Details
Bank balance
Capital
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Debit
Credit
Carriage outwards
Closing stock
Drawings
Fixtures and fittings
Opening stock
Provision for depreciation
fixtures and fittings
Purchases
Rent and rates
Sales
Wages and salaries
Suspense
After the corrected version of the trial balance was prepared, the following errors and
omissions were found in the accounting system.
During the year Harsha had invested a further 15 000 into the business. This had been
correctly entered into the business bank account but had not been entered
into the capital account.
In March 2010 some new fixtures had been purchased at a cost of 1 500; these
had been debited to the purchases account.
In December 2010 Harsha had received a refund of rates amounting to 882. This
had been correctly entered into the business bank account but no further entries
had been made.
Wages paid in December 2010 totalling 200 had been correctly entered in the
cash book, but had been debited in the wages account as 1 200.
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(b) Prepare journal entries to correct these errors and omissions. Narratives are not
required.
Date
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Details
Debit
Credit
(c) Prepare the suspense account, clearly showing the opening balance calculated in
part (a).
Suspense Account
Date
Details
Date
Details
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Complete the table below for each of the items (iii) to (vi). The answers to (i) and (ii) have been done
to show the layout.
Items
(i)
Trial balance
Net profit
No effect
(ii)
****Prepare a Suspense account(where necessary) using items for items (I) to (vi)
SUSPENSE A/C
Date
Details
Date
Details
Q. Which side of the trial balance has a deficit ? By how much ?what is the balance on
suspense a/c?
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