Question

1 During August 2013 Smith discovered the following matters:
(i). New shop fittings had been purchased on credit from Quick build Suppliers for $4000,
but no entry had been made in Smith’s books.
(ii). A sale on credit to S Holmes $500, had been entered in the sales account and
in S Holmes’s account as $510.
(iii). Goods bought on credit from J Robertson $1200, had been entered in J Robertshaw’s account.
(iv). The purchase of office equipment for $2500 had been entered in the purchases account.
(a) Make the required entries in Smith’s journal to correct each of the above errors. No narratives
are required.
(b) Name the type of error in (i) to (iv) above.
2 On 30 April 2012, the totals of the trial balance drawn up for Rachael Guthrie’s business did not agree.
The difference between the totals was entered in the suspense account.
An investigation of the difference revealed the following errors in the period for which the trial balance
had been prepared:
(i) The sales total had been under cast by $500.
(ii) Discount received $144.50 had been debited to the discount allowed account. The
correct entry had been made in the creditor’s accounts.
(iii) Rachael had taken goods amounting to $80 cost from the business for her own use.
No entries had been made to record this.
(iv) Goods for resale had been purchased by cash for $350. The correct entry had been
made in the purchases account but the cash account had been credited with $530.
(a) Set out the journal entries required to correct the above errors. Narratives are not required.

(b) Write up the suspense account, including the open balance. Assume that balance totals
agree after the errors have been corrected.
3. Miranda prepared her draft final accounts for

Answer 1

Answer:

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