+ 31 October 20XY. the books. to the cash book but ases account. The method at 50% per en made in the ledger d returned had been as $699. Manjit Ltd ar the account. re.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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3. A trial balance was extracted from the manually prepared accounts of Manjit Ltd at 31 October 20XY.
The trial balance did not balance and investigation revealed the following errors.
i.
Sales of goods on credit to P. Singh, amounting to $400, had been omitted from the books.
ii.
A cheque for $190 received from S Greene, a debtor, had been correctly posted to the cash book but
omitted from the trade receivable's account.
A computer purchased on 30 April 20XY for $900 had been debited to the purchases account. The
company policy is to charge depreciation on the computer using reducing balance method at 50% per
annum. The depreciation accrues evenly throughout the year. No entries have been made in the ledger
to record the depreciation of the computer.
iv.
A credit note of $100 received from Apollo Warehouses Ltd for goods supplied and returned had been
posted as a credit to the account of Apollo Warehouses Ltd.
A cheque for $698 for rent paid was recorded in the cash book and rent account as $699. Manjit Ltd
does not operate control accounts.
V.
REQUIRED
a. Draw up journal entries to correct each of the errors (narratives not required).
b. Prepare the suspense account showing the opening balance and the entries to clear the account.
c. (i) Identify and briefly explain four types of errors not disclosed by a trial balance.
(ii) Categorise the errors (i), (iii) and (v) above.
Transcribed Image Text:3. A trial balance was extracted from the manually prepared accounts of Manjit Ltd at 31 October 20XY. The trial balance did not balance and investigation revealed the following errors. i. Sales of goods on credit to P. Singh, amounting to $400, had been omitted from the books. ii. A cheque for $190 received from S Greene, a debtor, had been correctly posted to the cash book but omitted from the trade receivable's account. A computer purchased on 30 April 20XY for $900 had been debited to the purchases account. The company policy is to charge depreciation on the computer using reducing balance method at 50% per annum. The depreciation accrues evenly throughout the year. No entries have been made in the ledger to record the depreciation of the computer. iv. A credit note of $100 received from Apollo Warehouses Ltd for goods supplied and returned had been posted as a credit to the account of Apollo Warehouses Ltd. A cheque for $698 for rent paid was recorded in the cash book and rent account as $699. Manjit Ltd does not operate control accounts. V. REQUIRED a. Draw up journal entries to correct each of the errors (narratives not required). b. Prepare the suspense account showing the opening balance and the entries to clear the account. c. (i) Identify and briefly explain four types of errors not disclosed by a trial balance. (ii) Categorise the errors (i), (iii) and (v) above.
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