The trial balance of Vivien for 30 June 2020 did not agree, and the difference was posted to aSuspense Account.The following errors were subsequently discovered:(i) A payment of RM1,144 in cash by Fatt Lee, a debtor, had been posted to theaccount of Lee Fatt.(ii) A credit notes for RM234 from Ali had been posted to the account of Ali asRM23.(iii) Discounts allowed of RM123 had been posted to the credit of discountsreceived.(iv) Goods totalling RM4,567 had been purchased and had been correctly enteredin the purchases daybook but had not been posted to the purchase's ledgercontrol account.(v) No entries were made in the books for goods originally sent to Wong on a saleor return basis. These goods have now been sold and the value to be invoicedis RM4,321.(vi) A new car porch had been built at the house of Vivien. The cost of the carporch was RM6,789 and this had been charged to the 'factory building'account.(vii) The purchases daybook had been under-cast by RM1,000. The salesdaybook had been under-cast by the same amount.(viii) An invoice from Kasim for RM2,250 had been entered in the purchasesdaybook as RM2,520.Required:a. Identify the types of error which have occurred in items (i) to (viii) above.b. Prepare the adjusting journal entries for 30 June 2020, with narratives, tocorrect items (iii), (v), (vi) and (viii).c. Prepare the suspense account, showing clearly the original difference on theaccount. The trial balance of Vivien for 30 June 2020 did not agree, and the difference was posted to aSuspense Account.The following errors were subsequently discovered:(i) A payment of RM1,144 in cash by Fatt Lee, a debtor, had been posted to theaccount of Lee Fatt.(ii) A credit notes for RM234 from Ali had been posted to the account of Ali asRM23.(iii) Discounts allowed of RM123 had been posted to the credit of discountsreceived.(iv) Goods totalling RM4,567 had been purchased and had been correctly enteredin the purchases daybook but had not been posted to the purchase's ledgercontrol account.(v) No entries were made in the books for goods originally sent to Wong on a saleor return basis. These goods have now been sold and the value to be invoicedis RM4,321.(vi) A new car porch had been built at the house of Vivien. The cost of the carporch was RM6,789 and this had been charged to the 'factory building'account.(vii) The purchases daybook had been under-cast by RM1,000. The salesdaybook had been under-cast by the same amount.(viii) An invoice from Kasim for RM2,250 had been entered in the purchasesdaybook as RM2,520.Required:a. Identify the types of error which have occurred in items (i) to (viii) above.b. Prepare the adjusting journal entries for 30 June 2020, with narratives, tocorrect items (iii), (v), (vi) and (viii).c. Prepare the suspense account, showing clearly the original difference on theaccount.

a.(i) Error of commission: Fatt Lee's payment was credited to the incorrect account. (ii) Error of…

The trial balance of Vivien for 30 June 2020 did not agree, and the difference was posted to a Suspense Account. The following errors were subsequently discovered: (i) A payment of RM1,144 in cash by Fatt Lee, a debtor, had been posted to the account of Lee Fatt. (ii) A credit notes for RM234 from Ali had been posted to the account of Ali as RM23. (iii) Discounts allowed of RM123 had been posted to the credit of discounts received. (iv) Goods totalling RM4,567 had been purchased and had been correctly entered in the purchases daybook but had not been posted to the purchase's ledger control account. (v) No entries were made in the books for goods originally sent to Wong on a sale or return basis. These goods have now been sold and the value to be invoiced is RM4,321. (vi) A new car porch had been built at the house of Vivien. The cost of the car porch was RM6,789 and this had been charged to the 'factory building' account. (vii) The purchases daybook had been under-cast by RM1,000. The sales daybook had been under-cast by the same amount. (viii) An invoice from Kasim for RM2,250 had been entered in the purchases daybook as RM2,520. Required: a. Identify the types of error which have occurred in items (i) to (viii) above. b. Prepare the adjusting journal entries for 30 June 2020, with narratives, to correct items (iii), (v), (vi) and (viii). c. Prepare the suspense account, showing clearly the original difference on the account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The trial balance of Vivien for 30 June 2020 did not agree, and the difference was posted to a Suspense Account. The following errors were subsequently discovered: (i) A payment of RM1,144 in cash by Fatt Lee, a debtor, had been posted to the account of Lee Fatt. (ii) A credit notes for RM234 from Ali had been posted to the account of Ali as RM23. (iii) Discounts allowed of RM123 had been posted to the credit of discounts received. (iv) Goods totalling RM4,567 had been purchased and had been correctly entered in the purchases daybook but had not been posted to the purchase's ledger control account. (v) No entries were made in the books for goods originally sent to Wong on a sale or return basis. These goods have now been sold and the value to be invoiced is RM4,321. (vi) A new car porch had been built at the house of Vivien. The cost of the car porch was RM6,789 and this had been charged to the 'factory building' account. (vii) The purchases daybook had been under-cast by RM1,000. The sales daybook had been under-cast by the same amount. (viii) An invoice from Kasim for RM2,250 had been entered in the purchases daybook as RM2,520. Required: a. Identify the types of error which have occurred in items (i) to (viii) above. b. Prepare the adjusting journal entries for 30 June 2020, with narratives, to correct items (iii), (v), (vi) and (viii). c. Prepare the suspense account, showing clearly the original difference on the account.

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