Accounting Test Question COE No. 1 On Correction Of Errors

November 26th, 2006 Comments off
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Accounting Test Question COE No 1 On Correction Of Errors


Mr. A extracted a Trial Balance at 31 st December 2005 and found that it did not balance. He posted the difference to a Suspense Account. Later he found the following errors which accounted for the difference:

  1. The total of $365 for Discount Allowed for the month of July’05 had been posted to the credit side of Discount Received Account.
  2. A payment of $ 210 to Mr A from a debtor Mr XY had been posted to the credit of Mr TEY in error.
  3. Mr A had paid $ 2,640 wages and supplied materials costing $960 to his own employees in building a store at the rear of his factory. No adjustment had been made.
  4. A payment of $56 for Postage had been posted to that account as $65
  5. Mr A bought new fitting for his factory costing $1,800 but this transaction had been posted to the Purchases Account
  6. A payment of $96 for an electricity bill had been entered in the Cash Book but the double entry had not been made.


(a) Prepare the journal entries necessary to correct the errors and omission (19 marks)

(b) Prepare the Suspense Account showing the original difference in the Trial Balance ( 6 marks )

[ Refer Answer ]

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Financial Accounting


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