Question

SECTION B - FINANCIAL ACCOUNTING PRACTICE
5. The trial balance of Deba Duwe Enterprise failed to agree. The difference was entered in the suspense account. The following errors were later detected: A sum of $1000 received from Salako has been posted to his account; (ii) The sales day book was undercast by $4,560; (iii) Return outwards book was overcast by $140; (iv) Discount received, $410 from Damilola had been correctly entered in the cash book but not posted on Damilola's account; (v) Goods worth $750 returned to a supplier was recorded in his personal account as $570; (vi) Discount allowed was overcast by $310; (vii) Discount received column in the cash book has been overcast by $400. Prepare journal entries to correct the errors, and a Suspense Account.

Accepted Answer

(a) Journal entries:
Dr Suspense A/c $1,000 / Cr Saloko $1,000 (being amount not entered in Salako A/c)
Dr Suspense A/c $560 / Cr Sales A/c $560 (being amount undercast on sale day book)
Dr Returns outward A/c $140 / Cr Suspense A/c $140 (being correction for overcast of return outward)
Dr Damilola A/c $410 / Cr Suspense A/c $410 (being discount from Damilola not recorded in his account)
Dr Supplier A/c $180 / Cr Suspense A/c $180 (being amount understated in supplier account)
Dr Suspense A/c $310 / Cr Discount allowed A/c $310 (being overcast on discount allowed)
Dr Discount allowed A/c $400 / Cr Suspense A/c $400 (being amount overcast in discount received)

(b) Suspense Account:
Debit side: Salako $1,000; Sales $560; Dis allowed $310. Total $1,870.
Credit side: Returned outward $140; Damilola $410; Supplier $180; Discount received $400; Trial bal. difference $740. Total $1,870.

WAEC Accounting 2017 Theory — Question 11

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