i can not answes thoes qs can any body explane to my how can i deal with them
I AM VERY CONFUSING THE CORRECTION
SUSPENSE ACCOUNTS AND CORRECTION OF ERRORS
Type of errors Nature of errors Correction
Errors of omission A transaction is completely omitted or left out. No entry been made Apply fresh double entry
Errors of commission /Misposting When an entry is made in a wrong personal or nominal account. Close the wrong account and enter in the correct one
Errors of principle When an entry is made in the wrong class of account. Close the wrong account and enter in the correct one
Compensating errors When two errors of opposite sides cancel out each other. Increase account understated and decrease account overstated
Reversal of entries When both entries for a transaction are done opposite manner. Double amount and apply fresh double entry
An error of original entry When entries are posted for the books with a wrong figure. Add back to both accounts for undercast and subtract for overcast
Transposition errors Entering a transaction with a wrong figure on both accounts Add back to both accounts for undercast and subtract for overcast
ERRORS DISCLOSED BY THE TRIAL BALANCE AND REQUIRING USE OF SUSPENSE ACCOUNT:
Type of errors Nature Correction
Incorrect addition Making entries with wrong totals- undercast and overcast. Add back for undercast
Less for overcast via suspense
Omission in one account Making only one entry for a transaction. Enter in the account omitted via suspense
Reversal in one account Posting an entry into the wrong side of the account. Double amount enter in the correct side of the account via suspense
Transposition Using two different figures to make an entry. E.g. 75 and 57. Add back for undercast
Less for overcast via suspense
Misposting Cancel it from the wrong account via suspense
Q1. The electricity expense of £550 has been correctly credited to the bank account but has been debited to the rent account. Prepare the journal to correct the error.
Q2. The repairs expense of £735 has been correctly credited to the bank account but has been debited to the wages account. Prepare the journal to correct the error.
Q3. The rates expense of £1,500 has been correctly debited to the expense account, but has been credited to the fixed assets account. Prepare the journal to correct the error and clear suspense.
Q4. Some sales for cash of £900 had been correctly credited to the sales account.
No other entry was made. Prepare the journal to correct the error and clear suspense.
Q5. Some credit sales for £450 had been correctly credited to the sales account, and £540 debited to the debtors control account. Prepare the journal to correct the error and clear suspense.
Q6. A new fixed asset had been purchased for £5,800. The credit entry had been correctly made, but the debit entry had been made for £58,000. Prepare the journal to correct the error and clear suspense.
Q7. The following errors were discovered during the year in the accounts of ‘Comedy R Us’
(i) Purchases of comedy stage equipment for £35,000 was debited to purchases and credited to bank.
(ii) Discounts received of £75 were debited to the discount allowed. The other side of the entry was correctly recorded in the credit supplier’s account.
(iii) A payment received of £69 from a credit customer was debited to the sales ledger control account and credited to the bank account (iv) A fixed asset which originally cost £7,890, accumulated depreciation 2,367 was disposed of for £9,000. The only accounting entry was to debit cash.
(v) A cash payment to purchase a mobile comedy van had been correctly entered in the cash book but had been debited to the motor expenses account. The amount was £15,000.
(vi) A cash payment of £250 to purchase some stationery had been correctly entered in the cashbook but no other entry was made.
(vii) Cash drawings of £250 have not been accounted for.
Complete the journal entries to correct the errors.
The balance on the suspense account was £8,900 credit; show the entries that affect the suspense account to clear it.
Q8. The trial balance of Delta Limited did not agree, and a suspense account was opened for the difference. The following errors were subsequently found:
Error:
1 A cash refund due to customer A was correctly treated in the cash book and then credited to the sales ledger account of customer B
2 The sale of goods to a director for £300 was recorded by debiting sales revenue account and crediting the director's current account.
3 The total of the discount received column in the cash book had been credited in error to the discount allowed account.
4 Some of the cash received from customers had been used to pay sundry expenses before banking the money.
5 £5,800 paid for plant repairs was correctly treated in the cash book and then credited to plant and equipment asset account.
Which of the above errors would require an entry to the suspense account as part of the process of correcting them?
A Errors 1, 3 and 5 only B Errors 1, 2 and 5 only C Errors 1 and 5 only D. Errors 3 and 4 only
I AM STILL CINFUSING THE ACCRUALS AND PREPAYMENTS
ACCRUALS AND PREPAYMENTS
Q1. A business has a year-end of 31 December 2006. The last phone bill received and paid during the year covered the period to 31 October 2006.
Post year-end an invoice that covered November, December 2006 and January 2007 was received. The phone charge for that period was £600.
Required
Calculate the year-end accrual for the phone expense.
Q2. A business has a year-end of 31 December 2005. The last gas bill received and paid covered the period from 1 January 2005 to 31 July 2005. The bill was for £1,400.Gas is expected to accrue evenly over the year.
Required:
Based on the information provided, estimate the gas accrual for the year to 31 December 2005.
Q3. Harry started his business on 1.6.03. During the year ended 31 May 2004 he made the following electricity payments:
1.7.03 1 month to 30 June £80
1.10.03 Quarter ended 30.9.03 £280
1.1.04 Quarter ended 31.12.03 £310
1.4.04 Quarter ended 31.3.04 £300
Write up the electricity account including the appropriate accrual
Q4. Ollie started his business on 1.6.03. During the year ended 31 May 2004 he
made the following electricity payments:
1.7.03 1 month to 30 June £85 1.10.03 Quarter ended 30.9.03 £285
1.1.04 Quarter ended 31.12.03 £315 1.4.04 Quarter ended 31.3.04 £300
Write up the electricity account including the appropriate accrual
Q5. During the year Andrew paid £1,500 for premises insurance. This was to cover the period 1 January 2006 to 31 March 2007. Andrews’s year-end is 31 December 2006.
Required
Calculate the prepayment as at 31 December 2006.
Q6. Jason paid road tax of £120. This was for the year ended 30 June 2011.Jason’s year-end is the 28 February.
Required: Calculate the prepayment as at 28 February 2011.
Q7. Jerry started her business on 1.2.03. During the year ended 31 January 20X4
she made the following payments for rent
1.2.03 3 months to 30.4.03 £600 1.5.03 3 months to 31.7.03 £600
1.8.03 3 months to 31.10.03 £600 1.11.03 6 months to 30.4.04 £1200
Write up the rent account including the appropriate prepayment.
Q8. Sophie started her business on 1.2.03. During the year ended 31 January 2004
she made the following payments for rent
1.2.03 3 months to 30.4.03 £800 1.5.03 3 months to 31.7.03 £800
1.8.03 3 months to 31.10.03 £800 1.11.03 6 months to 30.4.04 £1600
Write up the rent account including the appropriate prepayment.
Q9. The electricity account for the year ended 30 June 20X3 was as follows: £
Opening balance for electricity accrued at 1 July 20X2 300
Payments made during the year:
1 August 20X2 for three months to 31 July 20X2 600
1 November 20X2 for three months to 31 October 20X2 720
1 February 20X3 for three months to 31 January 20X3 900
30 June 20X3 for three months to 30 April 20X3 840
Write up the electricity expense account clearly showing the accrual balance brought forward and the balance carried forward for the year ended 30 June 20X3.
Q10. On the 1 January, a business had prepaid insurance of £10,000. On the 1 August it paid, in full, the annual insurance invoice of £36,000, to cover the following year.
Write up the insurance expense account clearly showing the prepayment balance brought forward and the balance carried forward for the year ended 20X3.
Q11. A business has two properties, A and B, which are rented out to other parties.
The rental on property A for the year is £12,000 but only £10,000 has been received. The rental on property B is £17,000 and the client has paid £18,000 so far this year.
Required
Prepare the journals to account for the accrued and prepaid income on properties A and B.
Q12.
• 01/01/2009, D owed £2,000 in respect of previous year’s electricity. D made the following payments during y/e 31/12/09 :
• 6 Feb. £2,800; 8 May £3,000; 5 Aug £2,750; 10 Nov. £3,100
• At 31/12/09, D calculated that he owed £1,800 for last part of the year. The electricity charge to P & L account?
A. £1,800 B. £11,450 C. £11,650 D. £13,450
Q13. On 1 January 2007, Willy Mossop owed $2,000 in respect of the previous year’s electricity. Willy made the following payments during the year ended 31 December 2007:
6 February $2,800; 8 May $3,000; 5 August $2,750; 10 November $3,100
At 31 December 2007, Willy calculated that he owed $1,800 in respect of electricity for the last part of the year.
What is the electricity charge to the income statement?
A. $1,800 B. $11,450 C. $11,650 D. $13,450
Q14. Libby Farquar receives income from two rental units as follows:
Unit 1 Unit 2
Period $ Received $ Received
1.10.06– 31.12.06 2,100 30.9.06 1,300 2.1.06
1.1.07 – 31.3.07 2,150 27.12.06 1,300 4.4.07
1.4.07 – 30.6.07 2,150 25.3.07 1,300 1.7.07
1.7.07 – 30.9.07 2,200 21.6.07 1,400 6.10.X07
1.10.07 – 31.12.07 2,200 21.9.07 1,400 2.1.08
1.1.08 – 31.3.07 2,200 29.12.07 1,400 4.4.08
What is Libby’s rental income in the income statement for the year ended 31 December 2007?
A. $5,400 B. $8,700 C. $14,000 D. $14,100
I AM VERY CONFUSING THE CORRECTION
SUSPENSE ACCOUNTS AND CORRECTION OF ERRORS
Type of errors Nature of errors Correction
Errors of omission A transaction is completely omitted or left out. No entry been made Apply fresh double entry
Errors of commission /Misposting When an entry is made in a wrong personal or nominal account. Close the wrong account and enter in the correct one
Errors of principle When an entry is made in the wrong class of account. Close the wrong account and enter in the correct one
Compensating errors When two errors of opposite sides cancel out each other. Increase account understated and decrease account overstated
Reversal of entries When both entries for a transaction are done opposite manner. Double amount and apply fresh double entry
An error of original entry When entries are posted for the books with a wrong figure. Add back to both accounts for undercast and subtract for overcast
Transposition errors Entering a transaction with a wrong figure on both accounts Add back to both accounts for undercast and subtract for overcast
ERRORS DISCLOSED BY THE TRIAL BALANCE AND REQUIRING USE OF SUSPENSE ACCOUNT:
Type of errors Nature Correction
Incorrect addition Making entries with wrong totals- undercast and overcast. Add back for undercast
Less for overcast via suspense
Omission in one account Making only one entry for a transaction. Enter in the account omitted via suspense
Reversal in one account Posting an entry into the wrong side of the account. Double amount enter in the correct side of the account via suspense
Transposition Using two different figures to make an entry. E.g. 75 and 57. Add back for undercast
Less for overcast via suspense
Misposting Cancel it from the wrong account via suspense
Q1. The electricity expense of £550 has been correctly credited to the bank account but has been debited to the rent account. Prepare the journal to correct the error.
Q2. The repairs expense of £735 has been correctly credited to the bank account but has been debited to the wages account. Prepare the journal to correct the error.
Q3. The rates expense of £1,500 has been correctly debited to the expense account, but has been credited to the fixed assets account. Prepare the journal to correct the error and clear suspense.
Q4. Some sales for cash of £900 had been correctly credited to the sales account.
No other entry was made. Prepare the journal to correct the error and clear suspense.
Q5. Some credit sales for £450 had been correctly credited to the sales account, and £540 debited to the debtors control account. Prepare the journal to correct the error and clear suspense.
Q6. A new fixed asset had been purchased for £5,800. The credit entry had been correctly made, but the debit entry had been made for £58,000. Prepare the journal to correct the error and clear suspense.
Q7. The following errors were discovered during the year in the accounts of ‘Comedy R Us’
(i) Purchases of comedy stage equipment for £35,000 was debited to purchases and credited to bank.
(ii) Discounts received of £75 were debited to the discount allowed. The other side of the entry was correctly recorded in the credit supplier’s account.
(iii) A payment received of £69 from a credit customer was debited to the sales ledger control account and credited to the bank account (iv) A fixed asset which originally cost £7,890, accumulated depreciation 2,367 was disposed of for £9,000. The only accounting entry was to debit cash.
(v) A cash payment to purchase a mobile comedy van had been correctly entered in the cash book but had been debited to the motor expenses account. The amount was £15,000.
(vi) A cash payment of £250 to purchase some stationery had been correctly entered in the cashbook but no other entry was made.
(vii) Cash drawings of £250 have not been accounted for.
Complete the journal entries to correct the errors.
The balance on the suspense account was £8,900 credit; show the entries that affect the suspense account to clear it.
Q8. The trial balance of Delta Limited did not agree, and a suspense account was opened for the difference. The following errors were subsequently found:
Error:
1 A cash refund due to customer A was correctly treated in the cash book and then credited to the sales ledger account of customer B
2 The sale of goods to a director for £300 was recorded by debiting sales revenue account and crediting the director's current account.
3 The total of the discount received column in the cash book had been credited in error to the discount allowed account.
4 Some of the cash received from customers had been used to pay sundry expenses before banking the money.
5 £5,800 paid for plant repairs was correctly treated in the cash book and then credited to plant and equipment asset account.
Which of the above errors would require an entry to the suspense account as part of the process of correcting them?
A Errors 1, 3 and 5 only B Errors 1, 2 and 5 only C Errors 1 and 5 only D. Errors 3 and 4 only
I AM STILL CINFUSING THE ACCRUALS AND PREPAYMENTS
ACCRUALS AND PREPAYMENTS
Q1. A business has a year-end of 31 December 2006. The last phone bill received and paid during the year covered the period to 31 October 2006.
Post year-end an invoice that covered November, December 2006 and January 2007 was received. The phone charge for that period was £600.
Required
Calculate the year-end accrual for the phone expense.
Q2. A business has a year-end of 31 December 2005. The last gas bill received and paid covered the period from 1 January 2005 to 31 July 2005. The bill was for £1,400.Gas is expected to accrue evenly over the year.
Required:
Based on the information provided, estimate the gas accrual for the year to 31 December 2005.
Q3. Harry started his business on 1.6.03. During the year ended 31 May 2004 he made the following electricity payments:
1.7.03 1 month to 30 June £80
1.10.03 Quarter ended 30.9.03 £280
1.1.04 Quarter ended 31.12.03 £310
1.4.04 Quarter ended 31.3.04 £300
Write up the electricity account including the appropriate accrual
Q4. Ollie started his business on 1.6.03. During the year ended 31 May 2004 he
made the following electricity payments:
1.7.03 1 month to 30 June £85 1.10.03 Quarter ended 30.9.03 £285
1.1.04 Quarter ended 31.12.03 £315 1.4.04 Quarter ended 31.3.04 £300
Write up the electricity account including the appropriate accrual
Q5. During the year Andrew paid £1,500 for premises insurance. This was to cover the period 1 January 2006 to 31 March 2007. Andrews’s year-end is 31 December 2006.
Required
Calculate the prepayment as at 31 December 2006.
Q6. Jason paid road tax of £120. This was for the year ended 30 June 2011.Jason’s year-end is the 28 February.
Required: Calculate the prepayment as at 28 February 2011.
Q7. Jerry started her business on 1.2.03. During the year ended 31 January 20X4
she made the following payments for rent
1.2.03 3 months to 30.4.03 £600 1.5.03 3 months to 31.7.03 £600
1.8.03 3 months to 31.10.03 £600 1.11.03 6 months to 30.4.04 £1200
Write up the rent account including the appropriate prepayment.
Q8. Sophie started her business on 1.2.03. During the year ended 31 January 2004
she made the following payments for rent
1.2.03 3 months to 30.4.03 £800 1.5.03 3 months to 31.7.03 £800
1.8.03 3 months to 31.10.03 £800 1.11.03 6 months to 30.4.04 £1600
Write up the rent account including the appropriate prepayment.
Q9. The electricity account for the year ended 30 June 20X3 was as follows: £
Opening balance for electricity accrued at 1 July 20X2 300
Payments made during the year:
1 August 20X2 for three months to 31 July 20X2 600
1 November 20X2 for three months to 31 October 20X2 720
1 February 20X3 for three months to 31 January 20X3 900
30 June 20X3 for three months to 30 April 20X3 840
Write up the electricity expense account clearly showing the accrual balance brought forward and the balance carried forward for the year ended 30 June 20X3.
Q10. On the 1 January, a business had prepaid insurance of £10,000. On the 1 August it paid, in full, the annual insurance invoice of £36,000, to cover the following year.
Write up the insurance expense account clearly showing the prepayment balance brought forward and the balance carried forward for the year ended 20X3.
Q11. A business has two properties, A and B, which are rented out to other parties.
The rental on property A for the year is £12,000 but only £10,000 has been received. The rental on property B is £17,000 and the client has paid £18,000 so far this year.
Required
Prepare the journals to account for the accrued and prepaid income on properties A and B.
Q12.
• 01/01/2009, D owed £2,000 in respect of previous year’s electricity. D made the following payments during y/e 31/12/09 :
• 6 Feb. £2,800; 8 May £3,000; 5 Aug £2,750; 10 Nov. £3,100
• At 31/12/09, D calculated that he owed £1,800 for last part of the year. The electricity charge to P & L account?
A. £1,800 B. £11,450 C. £11,650 D. £13,450
Q13. On 1 January 2007, Willy Mossop owed $2,000 in respect of the previous year’s electricity. Willy made the following payments during the year ended 31 December 2007:
6 February $2,800; 8 May $3,000; 5 August $2,750; 10 November $3,100
At 31 December 2007, Willy calculated that he owed $1,800 in respect of electricity for the last part of the year.
What is the electricity charge to the income statement?
A. $1,800 B. $11,450 C. $11,650 D. $13,450
Q14. Libby Farquar receives income from two rental units as follows:
Unit 1 Unit 2
Period $ Received $ Received
1.10.06– 31.12.06 2,100 30.9.06 1,300 2.1.06
1.1.07 – 31.3.07 2,150 27.12.06 1,300 4.4.07
1.4.07 – 30.6.07 2,150 25.3.07 1,300 1.7.07
1.7.07 – 30.9.07 2,200 21.6.07 1,400 6.10.X07
1.10.07 – 31.12.07 2,200 21.9.07 1,400 2.1.08
1.1.08 – 31.3.07 2,200 29.12.07 1,400 4.4.08
What is Libby’s rental income in the income statement for the year ended 31 December 2007?
A. $5,400 B. $8,700 C. $14,000 D. $14,100