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correction of errors

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › correction of errors

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 25, 2021 at 9:43 am #618804
    badrinath
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    a page in sales day book had been added up to $28425 instead of $28825.

    a)debit Suspense 400
    credit Sales 400
    b)debit Trade receivable 400
    credit Sales 400

    April 25, 2021 at 1:54 pm #618817
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51563
    • ☆☆☆☆☆

    You do not say what you are asking!!

    Anyway the answer is ‘b’ because the same figure from the sales day book is entered in both the receivables and the sales accounts. Therefore the trial balance would still balance because both of the balances will be wrong. So there is no suspense account.

    Suspense accounts and Books of Prime Entry are both explained in full in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

    April 27, 2021 at 2:18 pm #618982
    badrinath
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    So when question states that Sales return book was under cast by $ 1990 , why do we pass journal entry
    Sales return account Dr 1990
    To Suspense account 1990

    Instead of
    Sales return account Dr 1990
    To Trade receivables 1990
    Since there is problem in sales return book , it should affect both accounts sales return account as well as trade receivables account .

    April 27, 2021 at 3:20 pm #618994
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51563
    • ☆☆☆☆☆

    The first entry is not correct. If the only error is that the sales return book is undercast the there is no entry in the suspense account and it is the second entry you have typed that is correct.

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