Accounting 9706 · AS & A Level · Reconciliation and verification

Reconciliation and verification — practice question

A business drew up a trial balance that contained a suspense account. Draft financial statements were then produced, and these showed a profit for the year of $85\,000. The following mistakes were later found. 1 Discounts allowed of $1\,000 had been debited to the discounts received account. 2 Motoring expenses of $4\,000 had been debited to the purchases account. 3 A payment for purchases of $5\,000 had been entered correctly in the cash book but credited to the drawings account. Once these errors had been corrected, the balance on the suspense account was cleared. What was the revised profit for the year?

  • A$76\,000
  • B$78\,000
  • C$80\,000
  • D$82\,000

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