a) State and explain TWO (2) errors that will not affect the balancing of the trial balance. (4 marks)

b) The trial balance of Pak Ltd has an excess of credit over debit of GH¢12,500. A suspense account has been opened to balance the accounts. The following transactions were later discovered:
i) Interest paid of GH¢5,000 and Interest received of GH¢8,000 have both been entered on the wrong side of the trial balance.
ii) The receivable control account balance of GH¢224,387 had been included in the trial balance as GH¢242,387.
iii) Sales of GH¢2,000 had been omitted from the sales records (i.e., from the sales day book).
iv) Purchase of raw material of GH¢4,005 was entered in the purchase account as GH¢4,500.
v) The balance on the current account with the Proprietor’s wife had been omitted from the trial balance. This item when corrected will clear the suspense account.

Required:
Open a suspense account and correct the above transactions in it. (6 marks)

c) ABC Ltd has prepared its October 2018 bank reconciliation for auditors to review. As at 31 October 2018 the ledger balance was GH¢2,450 (Credit) but the bank statement showed that the company has funds amounting to GH¢3,743.

The following are useful information:

• The company arranged for the bank to transfer the dollar equivalent of GH¢500,000 to a supplier in the United States. Charges on the transfer of 0.5% have not been recorded in the books of ABC Ltd.
• The CEO of ABC Ltd arranged for an amount of GH¢3,000 to be transferred from his personal bank account into the company’s account. The bank made the transfer on 31 October 2018, but ABC Ltd has not made any entry in its books.
• A Cheque for Electricity Company amounting to GH¢5,600 issued and recorded correctly in the bank statements appeared in ABC ledger as GH¢6,500.
• The following cheques issued by ABC Ltd in October 2018 did not appear on the bank statement:
  Cheque # 00450 – GH¢2,000
  Cheque # 00456 – GH¢4,800
  Cheque # 00500 – GH¢5,250
• Three cheques received and booked by ABC Ltd amounting to GH¢4,800 were not credited by the bank.
• Income earned on investment with an advice by the bank of GH¢2,457 was not recorded by the bank until 3 November 2018.

Required:
i) Prepare the bank account in ABC Ltd nominal ledger including any adjusting entries based on the information above. (5 marks)
ii) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in ABC Ltd nominal ledger. (5 marks)