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    Question: On Extracting A Trial Balance, The Accountant of Extra Consult

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    Mustafa Khudhair
    An accountant discovered errors in a trial balance including a $1,075 debit balance in a suspense account. Upon investigation, the accountant found 8 errors: 1) an overstated debit balance in postage, 2) an unpaid supplier invoice, 3) a vehicle purchase incorrectly entered in suspense, 4) an overstated credit balance in sundry income, 5) an overstated cash receipt, 6) a transaction incorrectly entered in suspense and capital, 7) an unrecorded customer receipt, and 8) an understated customer receipt and cash amount. Journal entries were made to correct the errors and suspense account.

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    Question: On Extracting A Trial Balance, The Accountant of Extra Consult

    Uploaded by

    Mustafa Khudhair
    354 views2 pages
    An accountant discovered errors in a trial balance including a $1,075 debit balance in a suspense account. Upon investigation, the accountant found 8 errors: 1) an overstated debit balance in postage, 2) an unpaid supplier invoice, 3) a vehicle purchase incorrectly entered in suspense, 4) an overstated credit balance in sundry income, 5) an overstated cash receipt, 6) a transaction incorrectly entered in suspense and capital, 7) an unrecorded customer receipt, and 8) an understated customer receipt and cash amount. Journal entries were made to correct the errors and suspense account.

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    An accountant discovered errors in a trial balance including a $1,075 debit balance in a suspense account. Upon investigation, the accountant found 8 errors: 1) an overstated debit balance in postage, 2) an unpaid supplier invoice, 3) a vehicle purchase incorrectly entered in suspense, 4) an overstated credit balance in sundry income, 5) an overstated cash receipt, 6) a transaction incorrectly entered in suspense and capital, 7) an unrecorded customer receipt, and 8) an understated customer receipt and cash amount. Journal entries were made to correct the errors and suspense account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    354 views2 pages

    Question: On Extracting A Trial Balance, The Accountant of Extra Consult

    Uploaded by

    Mustafa Khudhair
    An accountant discovered errors in a trial balance including a $1,075 debit balance in a suspense account. Upon investigation, the accountant found 8 errors: 1) an overstated debit balance in postage, 2) an unpaid supplier invoice, 3) a vehicle purchase incorrectly entered in suspense, 4) an overstated credit balance in sundry income, 5) an overstated cash receipt, 6) a transaction incorrectly entered in suspense and capital, 7) an unrecorded customer receipt, and 8) an understated customer receipt and cash amount. Journal entries were made to correct the errors and suspense account.

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    home / study / business / accounting / accounting questions and answers / on extracting a trial balance, the accountant of extra consult

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    Question: On extracting a trial balance, the accountant of Extra Consult …


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    On extracting a trial balance, the accountant of Extra Consult discovered a suspense account with a debit
    balance of $1,075 included therein; she also found that the debits exceeded the credits by $957. She
    posted this difference to the suspense account and then investigated the situation. She discovered:

    (1) A debit balance of $75 on the postage account had been incorrectly extracted on the list of balances
    as $750 debit.
    (2) A payment of $500 to a credit supplier, X, had been correctly entered in the cash book, but no entry
    had been made in the supplier’s account.
    (3) When a motor vehicle had been purchased during the year the bookkeeper did not know what to do
    with the debit entry so he made the entry Dr Suspense, Cr Bank $1,575.
    (4) A credit balance of $81 in the sundry income account had been incorrectly extracted on the list of
    balances as a debit balance.
    (5) A receipt of $5 from a credit customer, Y, had been correctly posted to his account but had been
    entered in the cash book as $625.
    (6) The bookkeeper was not able to deal with the receipt of $500 from the proprietor’s own bank
    account, and he made the entry Dr Bank and Cr Suspense.
    (7) No entry has been made for a cheque of $120 received from a credit customer M.
    (8) A receipt of $50 from a credit customer, N, had been entered into his account as $5 and into the cash
    book as $5.
    REQUIRED
    (a) Prepare the Journal entries to correct the above errors. (Narratives are required)
    (b) Prepare the Suspense Account.

    Expert Answer

    Isha@12 answered this


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    2,132 answers

    Debit Credit

    1. suspense 675

    postage 675

    [ To record correction of overstated postage account]

    2. accounts payable 500

    suspense 500

    [ To record correction of debit to wrong account]

    3. Motor vehicles(equipment) 1575

    suspense 1575

    [ To record correction of wrong debit]

    4. Suspense 162

    sundry income 162

    [ To record correction of wrong entry to suspense and


    sundry income]

    5. suspense 620

    cash 620

    [ To record correction of overstated cash account]

    6. suspense 500

    capital 500
    [ To record correction of entry to wrong account]

    7. bank 120

    accounts receivables (M) 120

    [ To record entry which was omitted]

    8 cash 45

    accounts receivables (N) 45

    [ To record correction of understatement of both


    account]

    sl no amount sl no amount

    balance 1075 trial balance difference 957

    1. postage 675 2 accounts payable 500

    4 sundry income 162 3 motor vehicles 1575

    5 cash 620

    6 capital 500

    3032 3032

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