Question nineteen: At the end of a financial year, the trial balance of a small company failed to agree and the difference was entered in a suspense account. Subsequently, the following errors were discovered: (i) The sales day book had been undercast by shs. 10. (ii) A customer's personal account has been correctly credited with shs.2 discount, but no corresponding entry was made in the discount column of the cash book. (iii) Discounts allowed for July, amounting to shs.70 were credited instead of being debited to the discount account. (iv) A debit balance on the account of D Bird, a customer, was carried forward shs. 10 short. (v) An old credit balance of shs.3 on a customer's account (J Flyn) had been entirely overlooked when extracting the balances. Required: (a) Prepare, where necessary, the journal entries to correct the errors. (b) Draw up a statement showing the impact of these errors upon the trial balance.

Question nineteen: At the end of a financial year, the trial balance of a small company failed to agree and the difference was entered in a suspense account. Subsequently, the following errors were discovered: (i) The sales day book had been undercast by shs. 10. (ii) A customer's personal account has been correctly credited with shs.2 discount, but no corresponding entry was made in the discount column of the cash book. (iii) Discounts allowed for July, amounting to shs.70 were credited instead of being debited to the discount account. (iv) A debit balance on the account of D Bird, a customer, was carried forward shs. 10 short. (v) An old credit balance of shs.3 on a customer's account (J Flyn) had been entirely overlooked when extracting the balances. Required: (a) Prepare, where necessary, the journal entries to correct the errors. (b) Draw up a statement showing the impact of these errors upon the trial balance.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter5: Accounting Systems

Section: Chapter Questions

Problem 19E: After Bunker Hill Assay Services Inc. had completed all postings for March in the current year...

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