Answered: Correction of Errors Grace’s trial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Correction of Errors Grace’s trial balance did not balance, the debits exceeded the credits by $1 560. A suspense account was opened for the difference. You are asked to help and after inspection of the ledgers the following errors were found. $2 500 received from sales of old motor vehicle had been entered in the Sales Account. Purchases day book had been overcast by $200. A cheque of $1 900 from A. Brent was accidentally credited to A. Brian’s account. The owner took $2 800 worth of goods out of the business purchases. Bank charges $440 entered in the cash book have not been posted to the bank charges account. A sale of goods to R Christie $4 600 was correctly entered in the Cash Book but entered in the personal account ad $6 400. Required: a. The Net profit originally calculated for the previous year was $56 800. Show your calculation of the correct figure. Please answer ASAP

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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