Revision question on correction of errors and preparation of suspense account.

(a) Explain circumstances under which a suspense account may be opened.
(b) The trial balance totals of Mukunzi for the year ended 30 June 2017 were:
Debit TZS 400,000
Credit TZS 399,000



She recorded the difference in a suspense account and proceeded to prepare financial statements.  Further scrutiny of her accounting records revealed the following errors:

1 A credit sale TZS 8,000,000 was not entered the sales day book.
2 Discounts received TZS 230,000 were entered the debit side of the discounts allowed account as TZS 320,000 but properly recorded in the trade payables’ ledger account.
3 A cheque TZS 4,500,000 from Jane was wrongly recorded in Joan’s account as TZS 5,400,000 but properly recorded in the bank account.
4 Commission received TZS 160,000 and additional capital TZS 30,000,000 were all wrongly credited in the sales account but recorded properly in the corresponding ledger accounts.
5 Carriage inwards TZS 940,000 was wrongly debited in the carriage outwards account as TZS 490,000.  The corresponding account was properly treated.



REQUIRED:

Prepare for Makunzi for the year ended 30 June 2017:

(i) Journal entries to correct the above errors (ignore narrations).
(ii) A suspense account following the correction of the errors.

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