FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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.
Transcribed Image Text: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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