The trial balance of Deba Duwa Enterprise failed to agree. The difference was entered in the suspense account. The following errors were later detected:
i. A sum of $1000 received from Salako has been posted to his account;
ii. The sales day books was undercast by $560
iii. Return outwards books was overcast by $140
iv. Discount received, $410 from Damilola had been correctly entered in the cash book but not posted to Damilola’s account
v. Goods worth $750 returned to a supplier was recorded in his personal account as $750
vi. Discount allowed was overcast by $310
vii Discount received column in the cash book has been overcast by $400.
You are required to prepare:
(a) Journal entries to correct the errors
(b) Suspense Account.
Explanation
(a) Deba Duwa Enterprise General Ledger/Journal proper
| i. Suspense account Salako account Omission of amount from Salako not entered now corrected |
$ | $ |
| 1,000 |
1,000 | |
| ii. Suspense account Sales account Sales account undercast now corrected |
560 |
560 |
| iii. Returns outwards account Suspense account Returns outwards overcast now corrected |
140 |
140 |
| iv. Damilola account Suspense account Discount received from Damilola not posted now corrected |
410 |
410 |
| v. Suppliers accounts/trade creditors account suspense account Value of gds returned understated in supplier's acc now corrected |
180 |
180 |
| vi. Suspense account Discount allowed account Discount allowed overcast now corrected |
310 |
310 |
| vii. Discount received account Suspense account Discount received overcast now corrected |
400 |
400 |
(b) Suspense account
| $ Salako account 1000 Sales account 560 Disct allowed acc 310 1,870 |
$ Returns outwards account 140 Damilola account 410 Supplier's account 180 Discount received account 400 Difference in trial balance 740 1,870 |