Page 220 - F3 -FA Integrated Workbook STUDENT 2018-19
P. 220
Chapter 16
Example 1
Suspense accounts
Harvard Co prepared a trial balance as at 30 September 20X5 whch failed to
agree. Harvard uses legder control accounts and maintains memorandum
receivables’ and payables’ ledgers. The difference of $967 was entered into
the debit side of the suspense account. Following investigation, the following
errors were identified:
1 In the payables ledger, a purchase of goods on credit from Princeton for
$170 had been credited in error to the payables ledger account of
Rhodes.
2 The purchases daybook had been undercast by £200.
3 Machinery purchased at a cost of $150 had been debited to the
purchases account.
4 Early settlement discounts received of $260 had been recorded
correctly in the payables’ ledger control account but the other
accounting entry had not been made.
5 Cleaning materials purchased for $46 had been debited to the cleaning
account as $64.
6 A dividend of $1,200 paid by Harvard Co had been entered in the cash
book correctly but no other accounting entry had been made.
7 A prepayment account balance of $45 had been omitted from the trial
balance.
Required:
For each of the items noted, state the accounting entries required to
correct the error and show the entries in the suspense account to clear
that account.
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