Suspense Accounts

FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

Question

Your subordinate in POP-Two Ventures, an inexperienced bookkeeper, has informed you that the trial balance failed to agree by a difference of N170,000, recorded on the credit side of a suspense account. After investigating, you discovered the following errors:

Errors	Amount (N’000)
Cash payment debited to the bank cash book	360
Overcasting of sales	700
Overcasting of purchases	700
Returns inwards omitted from the books	380
Bank charges posted into the cash book without a corresponding entry elsewhere	370
Opening receivables balance brought down incorrectly	180
PPE sold, credited to sales account instead of the correct account	5,000

Required:

i. Effect the necessary corrections by means of journal entries (11 Marks)
ii. Prepare the suspense account (4 Marks)

(Total 15 Marks)

Answer

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Tags: Financial Corrections, Journal Entries, Suspense Accounts, Trial Balance Errors
Level: Level 1

Topic: Correction of errors
Series: NOV 2020

FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

Question

Yevugah has provided you with the following bank statement and bank account details in respect of the month ended 31 January 2018.

Statement Date: 31 January 2018
Account No: 13456892

Date	Particulars	Debit (GH¢)	Credit (GH¢)	Balance (GH¢)
01-Jan-18	Balance forward			55,940 Cr
03-Jan-18	Cheque 596	2,500		53,440 Cr
03-Jan-18	Lodgement		14,140	67,580 Cr
06-Jan-18	Cheque 597	120		67,460 Cr
06-Jan-18	Direct debit	2,020		65,440 Cr
12-Jan-18	Credit transfer		4,660	70,100 Cr
13-Jan-18	Cheque 600	1,420		68,680 Cr
14-Jan-18	Cheque 601	12,028		56,652 Cr
16-Jan-18	Lodgement		9,000	65,652 Cr
19-Jan-18	Cheque 599	18,004		47,648 Cr
23-Jan-18	Bank charges for December 2017	422		47,226 Cr
25-Jan-18	Quarterly interest received		62	47,288 Cr
27-Jan-18	Dishonoured cheque	1,600		45,688 Cr
27-Jan-18	Cheque 598	26,090		19,598 Cr
30-Jan-18	Cheque 603	5,048		14,550 Cr
31-Jan-18	Lodgement		14,500	29,050 Cr
31-Jan-18	Standing order: rent first quarter 2018	27,000		2,050 Cr

The books and records of Yevugah show the following transactions through the bank account for the month of January 2018:

Required:

a) Prepare Yevugah’s adjusted cash book including the necessary correcting entries as at 31 January 2018. (The answer format must clearly indicate whether each entry is a debit or credit). (10 marks)

b) Prepare a bank reconciliation as at 31 January 2018. (4 marks)

c) Explain TWO (2) reasons for preparing a bank reconciliation. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bank Reconciliation, Financial Statements, Suspense Accounts
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2019

FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

Question

Errors	Amount (N’000)
Cash payment debited to the bank cash book	360
Overcasting of sales	700
Overcasting of purchases	700
Returns inwards omitted from the books	380
Bank charges posted into the cash book without a corresponding entry elsewhere	370
Opening receivables balance brought down incorrectly	180
PPE sold, credited to sales account instead of the correct account	5,000

Required:

i. Effect the necessary corrections by means of journal entries (11 Marks)
ii. Prepare the suspense account (4 Marks)

(Total 15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Corrections, Journal Entries, Suspense Accounts, Trial Balance Errors
Level: Level 1

Topic: Correction of errors
Series: NOV 2020

FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

Question

Yevugah has provided you with the following bank statement and bank account details in respect of the month ended 31 January 2018.

Statement Date: 31 January 2018
Account No: 13456892

Date	Particulars	Debit (GH¢)	Credit (GH¢)	Balance (GH¢)
01-Jan-18	Balance forward			55,940 Cr
03-Jan-18	Cheque 596	2,500		53,440 Cr
03-Jan-18	Lodgement		14,140	67,580 Cr
06-Jan-18	Cheque 597	120		67,460 Cr
06-Jan-18	Direct debit	2,020		65,440 Cr
12-Jan-18	Credit transfer		4,660	70,100 Cr
13-Jan-18	Cheque 600	1,420		68,680 Cr
14-Jan-18	Cheque 601	12,028		56,652 Cr
16-Jan-18	Lodgement		9,000	65,652 Cr
19-Jan-18	Cheque 599	18,004		47,648 Cr
23-Jan-18	Bank charges for December 2017	422		47,226 Cr
25-Jan-18	Quarterly interest received		62	47,288 Cr
27-Jan-18	Dishonoured cheque	1,600		45,688 Cr
27-Jan-18	Cheque 598	26,090		19,598 Cr
30-Jan-18	Cheque 603	5,048		14,550 Cr
31-Jan-18	Lodgement		14,500	29,050 Cr
31-Jan-18	Standing order: rent first quarter 2018	27,000		2,050 Cr

The books and records of Yevugah show the following transactions through the bank account for the month of January 2018:

Required:

b) Prepare a bank reconciliation as at 31 January 2018. (4 marks)

c) Explain TWO (2) reasons for preparing a bank reconciliation. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bank Reconciliation, Financial Statements, Suspense Accounts
Level: Level 1

Topic: Bank reconciliations
Series: NOV 2019

Question Tag: Suspense Accounts

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FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

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FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

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FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

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FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

You're reporting an error for "FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors"

FA – Nov 2019 – L1 – Q3 – Bank reconciliations

Prepare bank reconciliation, adjust the cash book, and explain the reasons for bank reconciliation preparation.

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