Trial Balance of M/s Shinde Enterprises did not agree. It puts the difference to the Suspense A/c. Rectify the following errors and prepare the Suspense A/c to ascertain the original difference in the trial balance. 1. Amount paid for the installation of the machinery shs. 10000 was posted to the Repairs and maintenance A/c. 2. Total of Purchases book shs.50000 was not posted to the ledger. 3. Goods returned to John shs.3000 were recorded in Sales Book. 4. Salary paid to Ram shs.6000 was debited to his personal account. 5. Depreciation written-off on furniture shs.500 was not posted to the furniture account.

Trial Balance of M/s Shinde Enterprises did not agree. It puts the difference to the Suspense A/c. Rectify the following errors and prepare the Suspense A/c to ascertain the original difference in the trial balance. 1. Amount paid for the installation of the machinery shs. 10000 was posted to the Repairs and maintenance A/c. 2. Total of Purchases book shs.50000 was not posted to the ledger. 3. Goods returned to John shs.3000 were recorded in Sales Book. 4. Salary paid to Ram shs.6000 was debited to his personal account. 5. Depreciation written-off on furniture shs.500 was not posted to the furniture account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 6 Which of the following substantive procedures would most likely help an auditor determine whether accounts payable have been misstated? Examining reported purchases orders that appear to be too low. Reviewing disbursements subsequent to year end to determine if liabilities have been properly recorded on the year-end balance sheet. Searching customer returned goods that were not reported as returns. None of the answers provided
The total of a list of balances in Patricia Co’s receivables ledger was $643,700 on 30 September 20X9. This did not agree with the balance on Patricia Co’s receivables ledger control account. The following errors were discovered: (i) A credit balance on an individual customer’s account of $400 was incorrectly extracted as a debit balance (ii) An invoice for $3,553 was posted to the customer account as £3,535 (iii) The total of the sales returns day book was overcast by $600 What amount should be shown in Patricia Co’s statement of financial position for accounts receivable at 30 September 20X9? A. $642,918 B. $642,882 C. $644,482 D. $643,418
An aging of a company's accounts receivable indicates that $9700 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $3010 balance, the adjustment to record bad debts for the period will require a(n)
The following information is provided for the audit of Vial-tech. Performance materiality is twice the amount of materiality. There are no other misstatements other than those indicated. Account Accounts receivable Inventory Fixed assets All other accounts (net) Net assets $5,000 $20,000 $25,000 Amount $45,000 1,000,000 2,500,000 2,000,000 1,500,000 7,000,000 Performance Materiality Amount includes projected misstatement and allowance for sampling risk: In testing accounts receivable, the auditor tested $200,000 of receivables and found $5,000 of misstatements. The direct projected misstatement in accounts receivable excluding sampling risk is: O Insufficient information to determine. 40,000 60,000 10,000 40,000 150,000 Estimated Misstatements Overstating Income 45,000 10,000 5,000 5,000
The following two tests were carried out on the accounts payable at Gardens Nursing Home: 1: A number of suppliers were selected from the list of trade creditors at year-end and balances traced to supplier invoices and goods received notes to ensure goods were received prior to the year-end. For two creditors out of 15 tested the balance was only marginally overstated. Audit conclusion: Accepted as no material errors located. 2: Selected a number of suppliers’ invoices and checked that the pricing and discount terms have been reviewed and authorized by the purchase manager. Three out of 20 invoices tested had not been authorized and incorrect discounts were recorded for these invoices. A follow-up of the three samples with deviations did not highlight a pattern or specific reason for the errors. Audit conclusion: Accepted as the errors in discounts claimed were immaterial. Required: For each of the test results for Gardens Nursing Home: (a) Identify whether this is a test…
The financial records of the Movitz Company show that R. Dennis owes $4,100 on an account receivable. An independent audit is being carried out, and the auditors send a positive confirmation to R. Dennis. What is the most likely reason as to why a positive confirmation rather than a negative confirmation was used here?a. Control risk was particularly low for accounts receivable.b. Inherent risk was particularly high for accounts receivable.c. Dennis’s account was not yet due.d. Dennis’s account was not with a related party.
XYZ Company incurred the following costs for the month of August when it observed an activity level of 5,000 units Vanable co 532.500 Fixed costs $25,000; Mixed costs $21,500, Total costs $79,000. During October, the activity level was 16,000 units and the cnts incurred were $178,000 If the activity level were expected to be 7,000 units for the month of December, what amount of al costs would be expected? Select one DaS106,000 Ob$124,000 Oc None of the answers given a S115.000 S97.000
A company’s draft financial statements for 2021 showed a profit of $630,000. However, the trial balance did not agree, and a suspense account appeared in the company’s financial statements.Subsequent checking revealed the following errors:1 The cost of an item of plant $48,000 had been entered in the cash book and in the plant account as $4,800.2 Bank charges of $440 appeared in the bank statement in December 2021 but had not been entered in the company’s records.3 One of the directors paid $800 due to a supplier in the company’s payables ledger by a personal cheque. The bookkeeper recorded a debit in the supplier’s ledger account but did not complete the double entry for the transaction.4 The payments side of the cash book had been understated by $10,000. Which of the above items would require an entry to the suspense account in correcting them? What would the company’s profit become after the correction of the above errors?
tutuis Were: DEBIT CREDIT $387,642 $379,511 A suspense account was opened for the difference. Which one of the following errors would have the effect of reducing the difference when corrected? The petty cash balance of $500 has been omitted from the trial balance. B $4,000 received for rent of part of the office has been correctly recorded in the cash book and debited to rent account. C $3,000 paid for repairs to plant has been debited to the plant asset account. D An invoice for Mr A Smith for $400 has been posted to the account of Mrs B Smith in error.
A trial balance does not balance. The owner believes the following mistakes WOULD cause animbalance. Do you agree? (Answer TRUE or FALSE for each statement) A. The owner forgot to record a cash saleB. A credit sale was recorded as a debit to sales and a debit to trade receivablesC. When transferring the bank overdraft from the Cash T account it was entered on thedebit side of the trial balanceD. Rates expense of £500 was debited to rent expenses and credited to cashE. A payment to a supplier of £690 was entered to cash as £690 but to trade payables as£609