Question

Q. 32. Messers Modern Chemicals were unable to agree the trial balance on 3
March, 2019 and have raised a suspense account for the difference. Later the follow
errors were discovered and rectified and the suspense account was balanced :
(a) The addition of the "sundry purchases" column in the tabular purchase
journal was short by 150 and other totals were in order.
(b) A bill of exchange (received from Gupta) for 2,000 had been returned by the
bank as dishonoured and had been credited to the bank and debited to bills
receivable account.
(c) Goods to the value of 105 returned by a customer, Thomas, had been posted
to the debit of Thomas and also to sales returns.
(d) Sundry items of rurniture sold for 3,000 had been entered in the sales day
book, the total of which had been posted to sales account.
(e) An amount of 600 due from Vaz, a customer had been omitted from the
schedule of sundry debtors.
6) Discount amounting to 30 allowed to a customer, had been posted in his
account, but not posted to discount account.
(g) Insurance premium of 450 paid on 31st March, 2018 for the year ended 31st
March, 2019 had not been brought forward.
You are required to :
(1) Pass journal entries to rectify the above mistakes.
(11) Draw up the suspense account after rectifying the above mistakes and
explain how the above errors affect the book profits for the year ended 31st
March, 2019​

Answer 1

Answer:

a) Sundry Purchases A/C Dr. 150

To Suspense A/C 150

b) Gupta Dr. 2000

To B/R A/C 2000 (Maybe)

c) Suspense A/C Dr. 210

To Thomas 210

d) Sales A/C Dr. 3000

To Furniture A/C 3000

e) Debtors A/C Dr. 600

To Vaz 600

6) Discount Allowed A/C Dr. 30

To Suspense A/C 30

g) Prepaid Insurance A/C Dr. 450

To Suspense A/C 450

Suspense A/C

Dr.

To Thomas 210

To bal c/d 420

Cr.

By Sundry Purchases 150

By Discount 30

By Insurance 450

Total Of Sus. A/C 630

Answer 2

Answer:

If it is after the preparation of final accounts.