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1. In question 29.19, why is 4, a cheque payment to a supplier of $4200 charged to the account in June 20×5 recorded in the cash book as a receipt, adding 8400 to balance per bank statement?
2. In question 30.1, why are you adding another extra depreciation for disposal as well? Isn’t disposal accounted for in calculating depreciation of Balance b/f?
3. In question 30.9, from the previous question, item 2,3 require an entry to the suspense account in correcting them, why is item 1,2 being corrected?
1. Item 4 is a payment and should therefore increase the overdraft. They have treated as a receipt and therefore reduced the overdraft. So it needs removing as a receipt (which increases the overdraft by 4,200) and then putting in as a payment (which increases the overdraft by another 4,200).
2. The disposal occurred half way through the year and therefore depreciation needs calculating on it for half the year.
3. Items 1 and 2 did not stop the trial balance balancing (so no entry in suspense account) but they do both affect the profit.
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