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Suspense Account Assessment

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Mohammad Ali Shafiq
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7 views

Suspense Account Assessment

Uploaded by

Mohammad Ali Shafiq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1 Alex Green is a trader.

The totals of her trial balance at 31 December 2023 did not


agree. The debits exceeded the credits by $3,200. Alex Green opened a suspense
account.
The following errors were later discovered:
Rent expense of $3,000 had been entered as $5,500 in the rent account. The correct
entry had been made in the cash book.
The total of the discount allowed column in the cash book of $600 had been debited to
the discount received account in the general ledger.
Credit sales of $1,800 to Olivia had been correctly entered in the sales account but
debited as $1,200 in Olivia’s account.
A cheque of $900 received from Liam had been correctly entered in the cash book but
credited to Noah’s account.
(a) Prepare journal entries to correct errors 1 to 4. Narratives are not required.
Alex Green
Journal
Error Details Dr. $ Cr. $
numbe
r

(8)
(b) Prepare the suspense account. Start with the difference on the trial balance.
Alex Green
Suspense account
Date Details $ Date Details $
S

(6)

(c) What would be the impact of these errors if the draft profit is $ 28,950

Error Details $ $ $ $
Number Increase Decrease N /A Profit
Draft Profit 28,950

(6)

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