Exam 21: Errors and Suspense Accounts

A trial balance failed to agree and the difference was entered in a suspense account. Subsequently the following errors were identified and corrected, which resulted in the balance on the suspense account being eliminated. Discount allowed of £690 had been credited to the discount received account in error Motor expenses of £840 had been debited to the motor vehicles account in error. The credit side of the cash book had been under-cast by £1,000 when computing the closing balance. The original difference on the trial balance that was entered in the suspense account was:

Which of the following is a casting error?

Which of the following postings is most likely to correct the error? The trial balance of Alma Ltd is out by £5,000. The balances are as follows:

Net profits were calculated as being £20,400. It was discovered that revenue receipts of £2,800 had been treated as capital receipts and capital expenditure of £6,000 has been treated as revenue expenditure. The correct net profit should have been:

An increase in the provision for doubtful debts has been treated as a decrease in the financial statements. The amount is £4,000. Which of the following explains the resulting effects?

Select your answer by means of the following code : If 1, 2 and 3 are correct If 1 and 2 only are correct If only 1 is correct If only 3 is correct Which of the following statements about suspense accounts is/are correct?

After calculating your company's profit for 20X1, you discover that: (i) A non-current asset costing £50,000 has been included in the purchases account (ii) Stationery costing £10,000 has been included as closing inventory of raw materials instead of stock of stationery. These two errors have had the effect of:

Which of the following is regarded as an internal control weakness?

When an incorrect amount has been entered in a book of prime entry, this is known as:

An error of principle entry would occur if the sale of goods was:

When an invoice dated 28 December has not been included in the accounts for the company to the year end 31 December, this is known as:

Which of the following is a transposition error?

A bad debt of £14 which should have been written off Carter's account was entered in the bad debts account correctly but was accidentally written off Hagan's account as £41?

Which of the following is an error or principle?

A double posting error entry would occur if the sale of goods was:

An error of original entry would occur if the sale of goods was: