When the trial balance of ABC Ltd as at 30/9/2008 was prepared, the debit side was short by $ 1195. A suspense account was created in order to achieve the balance: Examination of the books showed the following: Discount allowed of $76 had been credited to the Discount Received Account A sale of $151 to Mr. A had been posted correctly to the personal account but entered in the Sales Day book as $ 115 A Cheque received from Mr. B entered correctly in the Cash Book as $766 had been posted to the company’s account as $760 The Purchase of new machinery for $1200 had been posted to the Stock account. Depreciation is ignored for the year in which the machinery is purchased A sale of $265 to Mr. C had not been posted to his account A petty cash balance of $100 was omitted from Trial Balance Bank interest charges of $720 were correctly entered in the Cash Book but the other side of the double entry had been omitted Required: Prepare Journal entries to correct the above errors, without narrations. Prepare a Suspense Account

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. When the trial balance of ABC Ltd as at 30/9/2008 was prepared, the debit side was short by $ 1195. A suspense account was created in order to achieve the balance:

Examination of the books showed the following:

  1. Discount allowed of $76 had been credited to the Discount Received Account
  2. A sale of $151 to Mr. A had been posted correctly to the personal account but entered in the Sales Day book as $ 115
  3. A Cheque received from Mr. B entered correctly in the Cash Book as $766 had been posted to the company’s account as $760
  4. The Purchase of new machinery for $1200 had been posted to the Stock account. Depreciation is ignored for the year in which the machinery is purchased
  5. A sale of $265 to Mr. C had not been posted to his account
  6. A petty cash balance of $100 was omitted from Trial Balance
  7. Bank interest charges of $720 were correctly entered in the Cash Book but the other side of the double entry had been omitted

Required:

  1. Prepare Journal entries to correct the above errors, without narrations.
  2. Prepare a Suspense Account

 

 

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