Rai works as a trader and had completed his trial balance on 31 January 2023. The credit column total was $152 higher than the debit column total, so he entered the difference in a suspense account.
Rai then found the following mistakes.
1 Wages, $200, had been entered in the cash book but left out of the wages account.
2 A credit purchase of $247 from Stella had been debited to Stella’s account and credited to the purchases account.
3 Both the rent payable account and the sales account had been overstated by $100.
4 A cheque for motor expenses, $75, had been posted twice to the motor expenses account.
5 A payment to Jasper of $196 had been recorded in Jasper’s account as $169.
(a)[10]
Make the journal entries needed to correct errors 1-5. Narratives are not needed.
(b)[4]
Prepare a suspense account.
(c)[4]
Calculate Rai’s profit after the correction of errors 1-5.
(d(i))[1]
State one further use of the trial balance.
(d(ii))[1]
State one additional use of the journal.
Worked solution & mark scheme
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