Question Tag: Correction of Errors

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  • 16 Marks

FA – May 2016 – L1 – SB – Q1c – Correction of Errors

Prepare journal entries to correct errors in the accounts.

The following balances were extracted from the books of Arewa & Sons on December 31,
2015.

On investigation, you discovered the following:
(i) Receivables amounting to N75,980,000 have been omitted.
(ii) Receivables amounting to N2,800,000 have been written off as bad debt, but no
postinghadbeenmadethus renderingtheentryasingleentry.
(iii) Discount received shown in the cashbook and totaling N4,065,000 had not been
posted to the general ledger.
(iv) The figure of wages shouldhavebeenN122,050,000.
(iv) DrawingsamountingtoN29,730,000 have been omitted.

You are required to

i. Prepare journal entries to correct the errors.
ii. Prepare the trial balance after effecting the corrections.

c

i) Journal Entries to correct the errors

c

(ii) Adjusted Trial Balance – 31 December 2015

Tutorials
(i) Initial Trial Balance

(ii) Suspense Account

  • 1 Marks

FA – MAY 2015 – L1 – SA – Q3 – Correction of Errors

Determine the journal entries to correct an error involving telephone and motor vehicle expenses.

A draft financial statement of DS Enterprises revealed that an amount of N10,000 expended on repairs of telephone was recorded as motor vehicle expenses. State the entries to reverse this error.
A. Dr. Motor vehicle expenses account, Cr. Telephone expenses account
B. Dr. Telephone expenses account, Cr. Suspense account
C. Dr. Motor vehicle account, Cr. Suspense account
D. Dr. Telephone expenses account, Cr. Motor vehicle expenses account
E. Dr. Suspense account, Cr. Telephone expenses account

Answer: D
Explanation:
The error involves the misclassification of expenses. The correct journal entry is to debit the telephone expenses account and credit the motor vehicle expenses account to rectify the misposting.

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