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Goran has made the following errors.
1. a purchase of $1000 was entered in the purchase day book as $100
2. a purchase of $500 was correctly recorded in the payables control account and was debited to the vehicles account
How is Goran’s trial balance affected by these errors?This isn’t as much of a wording question and more to do with day books- i thought 1 just meant that the entry was
Dr purchases 100
Cr AP 1000
but since the answer is: debits will equal credits then that can’t be the case. both sides were entered as 100
how do I know if the error is on both Dr and Cr or just one side? My initial thought is that only the Dr purchase was incorrect. So i often get these questions wrong.The day book is not part of the double entry.
For the double entry we take the total from the day book and enter that total in both Payables and Vehicles. So although both of the accounts will be wrong, they will both be wrong by the same amount.Ah alright, thank you.
For this question, I don’t understand how 2 would be detected by a trial balance, isn’t it just like an error of omission?Isra started a sole trader business during the year and operates basic computerised accounting software. The software automatically creates a suspense account when a manual journal entry is imbalanced. Each type of expense has its own general ledger account.
The following errors have been identified by Isra:
(1) Additional cash invested by Isra was coded to sales instead of capital in the general ledger
(2) Isra has not processed the manual journal entry for the year’s depreciation
(3) Isra posted a manual journal entry for heat and light expense against the incorrect expense account
(4) Isra processed a manual journal entry with a debit of $560 to prepayments but only credited expenses with $506Which of the above errors would be detected by extracting a trial balance?
1 and 2 only
1 and 3
1, 2 and 4
2 and 4 onlyI don’t know where you found the question, but as you have typed it then it would seem that it is an error of omission and therefore would not be detected by extracting a trial balance.
It was in one of the practice platform tests- and the answer is 2and4. How would 2 would be detected by extracting a trial balance?
I appreciate your response and that was also my initial answer, however the answer in the ACCA practice platform mock tests have stated that 2 and 4 are the correct answers…I’m having difficulty understanding their explanation though, it may be related to my interpretation of the question wording regarding what could be ‘detected’ using the TB.
the explanation from practice platform:
2- although no susp account would be created, this would be identified by the absence of a dep’n charge in the TB(as each expense has its own ledger account)do you mind explaining what this means?
Additionally, I have a question about the wording of a sentence in this question.
A company has prepared its bank reconciliation at 30 September 20X9 taking the following information into
account:
$
Outstanding lodgements 12,000
Unpresented cheques 14,700
**Dishonoured cheque not entered in the cash book 2,600**
The bank statement shows that the company has an overdrawn balance of $1,280.
What should be the adjusted cash book balance per the bank reconciliation at 30 September 20X9?When it says dishonoured cheque not entered in the cash book, I interpret it as the cheques were initially entered in the cash book, but not adjusted for the dishonouring later on. However the question actually means that the whole transaction was not recorded at all.
How do I tell what the sentence actually means? I often get these questions wrong due to incorrect interpretation of wording.As regards your first question:
The depreciation entry has not been made and so the trial balance will balance.
What the answer is saying is that you would notice this when looking at the TB because there would be no listing of the depreciation expense.
I would ignore this question because it is a very silly one indeed.
As regards your second question:
Here is answer is correct. The original cheque will have been entered in the cash book just as all cheques will have been entered. This will include the cheque that was dishonoured because this will only be discovered later.
All that has not been recorded is the ‘correction’ when they found out that the cheque had been dishonoured.
This is sensible if you think about it – they wouldn’t delay entering cheques to wait until finding out whether or not they were dishonoured.
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