Natalie drew up her trial balance at the end of the year on 31 March 2024. The totals did not match, so she needed to open a suspense account. The debit total of the trial balance was $357 more than the credit total.
Natalie then found the following errors:
1 A bank transfer of $420 received from a credit customer, Sarah, had been entered correctly in the bank account, but no further posting had been made.
2 Natalie introduced her personal vehicle to the business, valued at $7000. This had been debited to the capital account and credited to the vehicle maintenance account.
3 Purchases of $270 had been correctly posted to the suppliers account, but only $207 had been debited in the purchases account.
4 No posting had been made for general expenses of $126 paid by bank transfer.
5 Cash drawings of $200 had been debited to the cash account and credited to the drawings account.
(a)[10]
Prepare the journal entries on page 11 needed to amend errors 1 to 5. Narratives are not needed.
(b)[3]
Draw up the suspense account as at 31 March 2024.
(c)[2]
Complete the table by naming the type of error that occurred in errors 4 and 5.
(d)[5]
Complete the table below by placing a tick (✓) in the correct column to show the effect on profit for the year after each error is corrected.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.