Question

8. The following trial balance was extracted from the books of Dushimar Ventures on 31st December, 2015 (in Le): Fixed Assets 72,200; Stock 13,800; Debtors 6,300; Creditors 2,456; Bank overdrafts 528; Provision for depreciation 10,200; Sales 102,320; Capital 106,440; Purchases 72,308; Drawings 29,960; Sundry expenses 26,616; Provision for doubtful debts 360; Suspense Account 1,120. The following errors were discovered: (i) The total sales day book for December 2015 had been overstated by Le480; (ii) In January 2015, new office furniture was purchased for Le14,400, this was debited to Purchases Account; (iii) A cheque payment of Le864 to a supplier was entered in the book as Le1,044; (iv) A credit note of Le148 sent to a customer for returns was overlooked; (v) Payment of sundry expenses of Le640 had been omitted from the trial balance. You are required to prepare: (a) Journal entries to correct the errors; (b) Suspense Account.

Model answer

See the Journal Entries and Suspense Account tables in the Diagram column. The Suspense Account opens with a balance brought down of Le1,120 (the difference on the original trial balance), which is fully cleared by correcting the overstated sales figure (Le480) and the omitted sundry expenses (Le640), bringing the account to balance.

Accepted Answer

See the Journal Entries and Suspense Account tables in the Diagram column. The Suspense Account opens with a balance brought down of Le1,120 (the difference on the original trial balance), which is fully cleared by correcting the overstated sales figure (Le480) and the omitted sundry expenses (Le640), bringing the account to balance.

WAEC Accounting 2019 Theory — Question 8

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