Accounting 0452 · IGCSE · Correction of errors

Correction of errors — practice question

Razia’s financial year finishes on 30 September. On 30 September 2020, the trial balance totals did not match. The debit total was $10 450$ and the credit total was $10 250$. A suspense account was therefore opened. The errors below were then found.
(a)[6]

Prepare the suspense account, beginning with the balance created by the trial-balance difference. Balance or total the account as appropriate.

(b)[2]

Identify the error types for Error 2 and Error 4.

(c)[7]

Complete the table by putting a tick (✓) in the appropriate column to show how correcting each error affects the profit for the year.

(d)[5]

Advise Razia whether she ought to sell on cash terms only. Support your answer with two advantages and two disadvantages of selling on cash terms only.

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