Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
A Level Accounting
Verification of Accounting Documents
| Question | Answer |
|---|---|
| When doing a Bank Reconciliation, from what side of the Cash Book is the unpresented cheques figure taken? | Credit side. |
| State the layout for a Bank Reconciliation | Updated Cash Book + Unpresented Cheques − Outstanding Lodgements = Bank Statement Figure. |
| Define a Trial Balance | A summary of all debit and credit balances in the ledgers at a specific date used to check the arithmetical accuracy of bookkeeping entries. |
| Describe an Error of Commission | The correct amount is entered on the correct side but in the wrong account of the same class. |
| Describe a Reversal of Entries | Entries are made on the wrong side of both accounts involved in the transaction. |
| Describe an Error of Omission | A transaction is completely omitted from the accounting records. |
| Describe an Error of Principle | A transaction is recorded in the wrong class of account, such as capital expenditure treated as revenue expenditure. |
| Describe an Error of Original Entry | An incorrect amount is entered in the book of prime entry and then posted correctly using the incorrect figure. |
| Describe Compensatory Errors | Two or more independent errors cancel each other out, causing the trial balance to agree. |
| Define a Suspense Account | A temporary account used when there is uncertainty or an imbalance in the accounting records. |
| When is a Suspense Account used? | To make the trial balance agree temporarily while errors are investigated and corrected. |
| Correction: Machine costing £4,000 entered in Purchases Account as £400 | Cr Purchases £400 and Dr Suspense £400. |
| Correction: Discount Allowed of £250 credited to Discount Received | Dr Discount Received £250 and Cr Suspense £250. |
| Correction: Cheque for £3,000 paid to P Day entered as £1,500 in Bank Account | Cr Bank £1,500 and Dr Suspense £1,500. |
| Correction: Credit sale to P Brown of £700 recorded as £70 | Dr P Brown £630 and Cr Sales £630. |
| Correction: Credit sale to Jones Ltd recorded in Johan Ltd account | Dr Jones Ltd £650 and Cr Johan Ltd £650. |
| Correction: Cheque for £425 Motor Expenses entered in Motor Vehicles Account | Dr Motor Expenses £425 and Cr Motor Vehicles £425. |
| Correction: Sales Returns of £385 posted as a credit to Purchase Returns | Dr Purchase Returns £385 and Cr Suspense £385. |
| Correction: Bank Charges of £250 recorded as £25 in Bank Charges Account | Dr Bank Charges £225 and Cr Suspense £225. |
| Correction: Credit purchase of £2,400 from JD Supplies not posted to supplier account | Cr JD Supplies £2,400 and Dr Suspense £2,400. |
| Correction: £6,300 received from R Grant entered as £3,600 in debtor account | Cr R Grant £2,700 and Dr Suspense £2,700. |
| Correction: Loan Interest of £600 omitted from Loan Interest Account | Dr Loan Interest £600 and Cr Suspense £600. |
| Correction: Credit sale to R Alihan of £320 omitted from Sales Account | Cr Sales £320 and Dr Suspense £320. |
| Correction: Cheque for £360 paid to S Fowler omitted from Cash Book | Cr Bank £360 and Dr Suspense £360. |
| Correction: Credit purchase of £500 from H King omitted completely | Dr Purchases £500 and Cr H King £500. |
| Correction: Motor Expenses cheque £345 recorded as £375 | Dr Bank £30 and Cr Motor Expenses £30. |
| Correction: Drawings for storage rent reduced from 25% to 20% | Dr Rent £500 and Cr Drawings £500. |
| Correction: Optical paid 60% of £15,000 less 2% discount, receipt not posted | Dr Bank £8,820, Dr Discount Allowed £180 and Cr Optical £9,000. |
| Correction: Motor Vehicles invoice of £53,600 included £3,500 maintenance | Cr Motor Vehicles £3,500 and Dr Motor Expenses £3,500. |
| Correction: Rent payable of £7,600 entered in Bank Account but credited to Rent Payable | Dr Rent Payable £15,200 and Cr Suspense £7,600. |
| Correction: Drawings of £3,500 credited to Wages Account | Dr Wages £3,500 and Cr Suspense £3,500. |
| Explain Errors in Addition (Casting Errors) | Mistakes made when adding totals in ledger accounts or trial balance columns. |
| Explain Errors in Balancing Accounts | Incorrect calculation of account balances. |
| Describe Errors in Posting | One-sided entries or different amounts posted to debit and credit accounts. |
| Explain Errors in Trial Balance Preparation | Incorrect transfer of balances or balances placed on the wrong side of the trial balance. |
| State three benefits of a Trial Balance | Aids preparation of financial statements; checks arithmetical accuracy; supports decision-making. |
| State three benefits of Suspense Accounts | Allows preparation of accounts while errors exist; helps identify errors; ensures continuity of accounting work. |
| Define a Control Account | A summary account showing the total balance of all accounts in a subsidiary ledger. |
| State three benefits of a Control Account | Checks accuracy; helps prevent fraud; summarises data. |
| State two limitations of Control Accounts | Cannot detect all errors; depends on accurate source records. |
| State transactions shown on the Credit side of a Trade Receivables Control Account | Cash received; Sales Returns; Discounts Allowed; Irrecoverable Debts Written Off; Contra Entries. |
| State transactions shown on the Debit side of a Trade Payables Control Account | Cash Paid; Purchases Returns; Discounts Received; Contra Entries. |
| What missing values can Control Accounts help calculate? | Credit Sales; Cash Received; Purchases. |
| State a benefit of a Contra Entry | Reduces receivables and payables; involves no cash movement; recorded in both control accounts. |
Created by:
durquhart1
Popular Accounting sets