Question

When preparing a trail balance, the bookkeeper found it disagreed by $600, the credit side being...

When preparing a trail balance, the bookkeeper found it disagreed by $600, the credit side being much bigger than the debit side. The difference was entered in a suspense account. The following errors were subsequently found:

1. A cheque for $32 for electricity was entered in the cash book but not posted to ledger.
2. The debit side of the wages account is overcast by $28.
3. There is a debit in the rent account of $198 but should be $918.
4. The purchase of an office machine for $3,000 has been posted to the debit side of the purchase account in error.
5. A cheque received from A Li for $80 has been credited to A Lee’s account in error.
6. The sale of some old office machine for $100 has been credited to sales account in error.
7. An amount of $17 paid for postage had been entered in the carriage outwards account in error.
8. Bank charges of $41 shown on the bank statement have not been entered in the books.
9. A credit sales to J Kong for $120 was entered in the sales day book and J Kong’s account as $12.
10. Discount received of $124 received from a creditor has correctly entered in the cash book and purchases ledger but omitted in the general ledger.
Required:

Prepare the journal entries necessary to correct the above errors and show the suspense account. Narratives not required.

Homework Answers

Answer #1

(1.)

Dr. Electricity expense account $32

Cr. Suspense account $32

(2.)

Dr. Suspense account $28

Cr. Wages account $28

(3.)

Dr. Rent account $720

Cr. Suspense account $720

(4.)

Dr. Machinery account $3000

Cr. Purchases account $3000

(5.)

Dr. A Lee account $80

Cr. A li Account $80

(6.)

Dr. Sale account $100

Cr. Old machine $100

(7.)

Dr. Postage account $17

Cr. Carriage Outward account $17

(8.)

Dr. Bank charges account $41

Cr. Bank account $41

(9.)

Dr. J Kong account $108

Cr. Sales account $108

(10.)

Dr. Suspense account $124

Cr. Discount Received account $124

Suspense account

Particular amount Particular amount
To Discount Received account $124 By Rent account $720
To Wages account $28 By Electricity expense account $32
To Balance c/d $600
$752 $752
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