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 $400.
You are required to prepare:
(a) Journal entries to correct the errors
(b) Suspense Account.
Approach. Only errors that affect one side of the ledger pass through the suspense account. For each, we post the correcting double entry, sending the balancing leg to Suspense; the suspense account then closes off against its opening difference.
(a) Journal Entries to correct the errors
| Details | Dr ($) | Cr ($) |
|---|
| i. Suspense | 2,000 | |
| Salako | | 2,000 |
| Being 1,000 received from Salako posted to the wrong (debit) side of his account; correct by crediting him 2,000. |
| ii. Suspense | 560 | |
| Sales | | 560 |
| Being Sales day book undercast by 560; Sales under-credited. |
| iii. Returns outwards | 140 | |
| Suspense | | 140 |
| Being Returns outwards book overcast by 140; over-credited. |
| iv. Damilola | 410 | |
| Suspense | | 410 |
| Being discount received of 410 in cash book not posted to Damilola's account. |
| v. Suspense | 750 | |
| Returns outwards | | 750 |
| Being goods returned to supplier entered in his personal account only; the credit to Returns outwards was omitted. |
| vi. Suspense | 310 | |
| Discount allowed | | 310 |
| Being Discount allowed overcast by 310; over-debited. |
| vii. Discount received | 400 | |
| Suspense | | 400 |
| Being Discount received column in cash book overcast by 400; over-credited. |
(b) Suspense Account
| Dr | $ | Cr | $ |
|---|
| Salako (i) | 2,000 | Balance b/d (original difference) | 2,670 |
| Sales (ii) | 560 | Returns outwards (iii) | 140 |
| Returns outwards (v) | 750 | Damilola (iv) | 410 |
| Discount allowed (vi) | 310 | Discount received (vii) | 400 |
| 3,620 | | 3,620 |
Note. The original trial-balance difference (opening credit balance in suspense) is $2,670, being the figure that makes the account balance. Errors of complete omission, principle or commission would not appear here as they do not disturb the trial balance; every entry above is a one-sided error.
Approach. Only errors that affect one side of the ledger pass through the suspense account. For each, we post the correcting double entry, sending the balancing leg to Suspense; the suspense account then closes off against its opening difference.
(a) Journal Entries to correct the errors
| Details | Dr ($) | Cr ($) |
|---|
| i. Suspense | 2,000 | |
| Salako | | 2,000 |
| Being 1,000 received from Salako posted to the wrong (debit) side of his account; correct by crediting him 2,000. |
| ii. Suspense | 560 | |
| Sales | | 560 |
| Being Sales day book undercast by 560; Sales under-credited. |
| iii. Returns outwards | 140 | |
| Suspense | | 140 |
| Being Returns outwards book overcast by 140; over-credited. |
| iv. Damilola | 410 | |
| Suspense | | 410 |
| Being discount received of 410 in cash book not posted to Damilola's account. |
| v. Suspense | 750 | |
| Returns outwards | | 750 |
| Being goods returned to supplier entered in his personal account only; the credit to Returns outwards was omitted. |
| vi. Suspense | 310 | |
| Discount allowed | | 310 |
| Being Discount allowed overcast by 310; over-debited. |
| vii. Discount received | 400 | |
| Suspense | | 400 |
| Being Discount received column in cash book overcast by 400; over-credited. |
(b) Suspense Account
| Dr | $ | Cr | $ |
|---|
| Salako (i) | 2,000 | Balance b/d (original difference) | 2,670 |
| Sales (ii) | 560 | Returns outwards (iii) | 140 |
| Returns outwards (v) | 750 | Damilola (iv) | 410 |
| Discount allowed (vi) | 310 | Discount received (vii) | 400 |
| 3,620 | | 3,620 |
Note. The original trial-balance difference (opening credit balance in suspense) is $2,670, being the figure that makes the account balance. Errors of complete omission, principle or commission would not appear here as they do not disturb the trial balance; every entry above is a one-sided error.
