Question

Modern Traders completed books of accounts, prepared Trial Balance for 30th June 2006. It found “debits” exceeded “credits” by $ 27,880 and was credited to suspense account, after sometime following errors were detected:
Sales returns book was undercast by $1,000.
Purchase of furniture for $3,000 was passed through purchase day book.
$3,750 paid as wages to workers for making show-cases was charged to wages account.
Purchase of $ 6,710 was posted to the debit of creditors account as $ 6,170.
A cheque for $2,000 received from Saleem was dishonoured & was passed to the debit of allowances account.
Goods costing $ 1,000 had been returned by a customer and were taken into stock but no entry was made in the books.
A sale of $ 2,000 to Imran & co. was credited to their account.
Sale amounting to $10,000 was passed through purchased day book. The customer’s account had however been correctly debited.
Required:
(A) Journal Entries (without narration) to rectify the errors with reasons.
(B) suspense Account

Answer 1

Answer on Question #62545 - Economics - Accounting

Modern Traders completed books of accounts, prepared Trial Balance for 30th June 2006. It found "debits" exceeded "credits" by $27,880 and was credited to suspense account, after sometime following errors were detected:

1. Sales returns book was undercast by $1,000.

2. Purchase of furniture for $3,000 was passed through purchase day book.

3. $3,750 paid as wages to workers for making show-cases was charged to wages account.

4. Purchase of $6,710 was posted to the debit of creditors account as $6,170.

5. A cheque for $2,000 received from Saleem was dishonoured & was passed to the debit of allowances account.

6. Goods costing $1,000 had been returned by a customer and were taken into stock but no entry was made in the books.

7. A sale of $2,000 to Imran & co. was credited to their account.

8. Sale amounting to $10,000 was passed through purchased day book. The customer's account had however been correctly debited.

Required:

(A) Journal Entries (without narration) to rectify the errors with reasons.

(B) suspense Account

Solution

(A) Journal Entries (without narration) to rectify the errors with reasons.

Journal Entries

(B) suspense Account

Dr.

Cr.

Suspense Account

http://www.AssignmentExpert.com