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A Level Accounting
Correction of Errors/Suspense Account
Question | Answer |
---|---|
Rent received Account has been undercast by £400 | Rent Received T Account will be Cr £400 (Increase in Income) and Suspense T Account will be Dr £400 |
A direct debit payment of £1 180 has been credited twice in the Cash book | Dr Bank T Account £1 180 (Increase in cash) and Cr Suspense T Account £1 180 |
Cash Purchases of £1 450 had been correctly entered into the Cash Book but Credited to the Trade Payable Account of Simpson and Co. | Dr Simpson and Co T Account £1 450 and Cr Suspense T Account £1 450 (This removes the misplaced figure from the Simpson and Co. Account) Dr Purchases T Account £1 450 (Increase in Assets) and Cr Suspense Account £1 450 |
Purchases Account was overcast by £250 | Cr Purchases T Account £250 (Assets down) and Dr Suspense T Account by £250 |
Discount Allowed of £85 had been recorded in the Cash Book but omitted from the Discount Allowed T Account | Dr Discount Allowed T Account £85(Increase in expenses) and Cr Suspense T Account £85 |
Purchases Account was undercast by £100 | Dr Purchases T Account by £100 (Assets up) and Cr Suspense T Account by £100 |
The Sales Account has been overcast by £1 000 | Dr Sales T Account £1 000 (Bring down the Sales figure) and Cr Suspense T Account by £1 000 |
The debit balance of £1 110 on the carriage inwards account has been brought down as £1 101 | £1 110 - £1 101 = £9 less than it should be Dr Carriage Inwards T Account £9 (increase expenses as carriage inwards is an expense) and Cr Suspense T Account £9 |
A new machine which cost £4 000 was entered in the Purchase Account as £400 | Cr Purchase Account £400 and Dr Suspense Account £400 (Transaction cannot be in purchase Account because it is not stock it is a fixed asset) Dr Machine Account £4 000 and Cr Suspense Account £4 000 |
Discount allowed of £250 had been credited to discount received | Dr Discount received £250 and Cr Suspense Account £250 (This removes error from Discount received) Dr Discount allowed £250 (Expenses up) and Cr Suspense Account £250 |
A cheque of £3 000 paid to P Day had been entered correctly in the account of P Day but had been entered as £1 500 in the Bank Account | Cr Bank Account £1 500 (This makes it up to the £3 000) and then Dr Suspense Account £1 500 |
A sale on credit to P Brown of £700 had been entered into the Sales Journal as £70 and had also been posted to the Sales Account as this amount | Dr P Brown Sales Journal 630 (Increase in debtors as it is a credit sale) and Cr Sales Account 630 (Increase in revenue) |
A sale on credit to Jones Ltd of £650 had been entered into the account of Johan Ltd | Dr Jones Ltd £650 (increase in debtors as it is a credit sale) and Cr Jones Ltd £650 (Decrease in debtor as the amount was put into the wrong debtor account). Transaction would not involve the suspense account because it would not affect Trial Balance. |
A cheque for £425 paid for Motor Expenses had been entered into the Motor Vehicles Account | Dr Motor Expenses £425 (Expenses up) and Cr Motor Vehicles Account £425 (Expenses down and remove it from the account where it had been entered incorrectly) |
Sales returns of £385 had been posted as a credit to the Purchase returns account | Dr Purchase Returns Account £385 and Cr Suspense Account £385 (This removes the transaction from the wrong account) Dr Sales Returns Account £385 (assets up) and Cr Suspense Account £385 |
Bank Charges of £250 had been correctly entered into the Cash Book, but had been recorded as £25 in the Bank charges Account | Dr Bank charges Account £225 (Expense up by £225. £25 was already present in Bank charges Account. So £225+£25 = £250) and Cr Suspense Account £225 |
Goods purchased on credit for £2 400 from JD Supplies had been correctly recorded in the Purchase Account but the corresponding double entry had not been made | Cr JD Supplies £2 400 (liabilities up) and Dr Suspense Account £2 400 |
A cheque received for £6 300 from R Grant, a debtor, had been processed for the correct amount in the Cash Book but entered as £3 600 in R Grants Account | Cr R Grant Account £2 700 (Decrease in debtors. £3 600 + £2 700 = £6 300 and the amount received) and Dr Suspense Account £2 700 |
Loan Interest of £600 had not been entered into the Loan Interest Account. The correct entry had been made in the Cash Book | Dr Loan Interest Account £600 (Expenses up) and Cr Suspense Account £600 |
A Sale on credit to R Alihan of £320 had been correctly entered into the account of R Alihan but no entry had been made in the Sales Account | Cr Sales Account £320 (Revenue up) and Dr Suspense Account £320 |
A cheque for £360 paid to S Fowler, a creditor, had been correctly posted to his personal account but no entry had been made in the Cash Book. | Cr Bank £360 (Money going out) and Dr Suspense Account £360 |
Purchase of goods from H King, amounting to £500, had been omitted from the books. | Cr H King £500 (Liabilities up) and Dr Purchase Account (Assets up) |
A cheque for £345 paid for Motor Expenses was recorded in the Cash Book and Motor Expenses Account as £375 | Dr Bank £30 (cash up) and Cr Motor Expense Account (Expenses down) |
Peter rents storage space for personal and business use. His drawings account has been Dr with £2 500 which represents 25% private usage of the storage rental cost. After discussion private element of storage rental cost is to be reduced to 20%. | Dr Rent Account £500 and Cr Drawings Account £500 (Drawings down by £500 because of the decrease from 25% to 20%) |
In September 2020, goods totaling £15 000 were supplied on credit to Optical. This transaction has been correctly posted to the ledgers. In October 2020, 60% of the goods were paid for by Optical less 2% cash discount. This receipt has not been posted. | Dr Bank £8 820 (60% of £15 000 - 2% Cash Discount) Dr Discount Allowed £180 (2% Cash Discount Allowed - Expenses up) and Cr Optical £9 000 (Debtors down) |
An invoice totaling £53 600 posted to Motor Vehicles Account included £3 500 which related to vehicle maintenance charges | Cr Motor Vehicles £3 500 (Expenses down) and Dr Motor Expenses £3 500 (Maintenance charges/expenses up) |
Rent payable of £7 600 had been correctly entered in the bank account but credited to the rent payable account. | Dr Rent Payable £15 200 (Increase in expenses. You have to do £7 600 twice. Once to correct the error from the Cr side of the Rent Payable Account and then once to show £7 600 has been paid) and Dr Suspense Account £7 600 |
Drawings of £3 500 had been correctly entered in the bank account but credited to the wages account. | Dr Wages Account £3 500 and Cr Suspense Account £3 500 (This removes error from wages account) Dr Drawings Account £3 500 (Expenses up) and Cr Suspense Account £3 500 |