QUESTION ONE

The trial balance at 31 December, 2016 showed a difference of shs. 77,000, being a storage on the debit side. A suspence account is opened and the difference of shs 77,000 is entered on the debit side of the account.

On 28th February 2017 all errors from the previous year were found as follows:

  1. A cheque of shs. 150,000 paid to Lucy Babu had been correctly entered in the cash book, but had not been entered in Lucy’s account.
  2. The purchases account had been under cast by shs. 20,000
  3. A cheque of shs. 93,000 received from Komba Simon had been entered in the cash book but had not been entered in Komba’s account.

Required:

  1. Write journal entries to correct the above errors as discovered
  2. Write up the suspence account.

  • Updated: 18 Jul 20
  • |
  • Attempts: 552
  • |
  • Correct: 229

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QUESTION TWO

Prepare the Journal entry to correct the following errors:

  1. The sale of goods to Marwa has been completely ommited from the books, T.shs 59,000/=
  2. Purchases of goods from Mwita, amounting to T.shs 44,000/= was entered in S.Mwita's account.
  3. The purchase of Machinery, T.shs 200,000/= was entered in purchases account.
  4. The sales and wages accounts were overcasted by T.shs 200,000/= each.
  5. A sales of T.shs 98,000/= to Gema, was entered in books as T.shs 89,000/=.
  6. Cash payment of T.shs 100,000/= was debited in cash account and credited to Mwajuma's account.
  7. The purchase day book was undercasted by T.shs 1,000,000/=.
  8. Discount received T.shs 60,000/= was treated as discount allowed.
  9. A balance of debtors, T.shs 700,000/= was omitted in the books.
  10. Returns outward journal has been overcasted by T.shs 100,000/=.

  • Updated: 18 Jul 20
  • |
  • Attempts: 552
  • |
  • Correct: 229

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QUESTION THREE

Mr. Kimti has presented you with a trial balance showing the difference which he then carried to suspense account.
Upon investigation, you find the following errors:

  1. The purchases journal was undercasted by T.shs 850,000.
  2. A debit balance of T.shs 250,000 had been brought forward in Karunguyeye account as T.shs 540,000.
  3. Carriage inwards, T.shs 230,000 has been posted to carriage outward account.
  4. Sales returns amounting to T.shs 160,000 had been credited in sales account.
  5. Cash payment of T.shs 715,000 to a creditor, has been correctly entered in his account. No entry was made in the cash book.

Required:

  1. Pass journal entries to correct the above errors

  • Updated: 18 Jul 20
  • |
  • Attempts: 552
  • |
  • Correct: 229

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QUESTION FOUR

The trial balance of Tunda Chungu as at 31 December, 2016 failed to agree. The payments side exceeded to receipts side by T.shs 20,000. After scrutiny, the following errors were discovered:

  1. A payment to Hatujuani, T.shs 10,000 was posted to Hatujuanani account as T.shs 1,000.
  2. Rent income, T.shs 2,430 was posted to the debit of Rent expenses as T.shs 3,240.
  3. An amount received from Pwaguzi, T.shs 14,500 was posted to Pwaguzi Co. Ltd. as T.shs 15,400 credit
  4. Payment made to Fussi, T.shs 26,800 was posted to the cash book only.
  5. An amount paid to Tuma Co. Ltd T.shs 15,050 was posted in the cash book only.

Required:
Show journal entries to correct the above errors


  • Updated: 18 Jul 20
  • |
  • Attempts: 552
  • |
  • Correct: 229

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QUESTION FIVE

After the extraction of the balances from the books of Bland, the totals of the trial balance failed to agree. The following items have subsequently been discovered.

  1. The total, shs 1200, of the discounts received column in the cash book had been posted to debit side of the relevant account.
  2. An old van with a net book value of shs 8,192 was sold at shs 5,000. The van was purchased six years ago and the depreciation had been provided at 60% p.a. by the reducing balance method. The sale proceed was entered as cash sales.
  3. The payment of shs 265 for rent had been entered correctly in the cash book but had been credited to the rent expenses account in the nominal ledger as shs 256.
  4. Invoices for shs 3,000 for advertising expenses had been included in creditors when in fact they were related to the following period.
  5. shs 1,350 worth of goods, sold to a customer but not yet delivered had been included in the ending stock.
  6. In arriving at the debtors figure in the trial balance an individual debtor’s balance of shs 1,789 was incorrectly taken as shs 7,189.
  7. No entry had been made in the accounts to record the receipts of a cheque for shs 6,000 from White, a supplier. The cheque was a refund relating to previous overpayment for goods supplied.

Required:

  1. Prepare the journal entries to correct the above errors

  • Updated: 18 Jul 20
  • |
  • Attempts: 192
  • |
  • Correct: 44

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QUESTION SIX

Statement of Financial Position of Mayungu as a 31 December 2020
TZS TZS
Fixtures and fitting 12,500,000 Capital 10,000,000
Stock 5,000,000 Net profit for year 8,650,000
Debtors 2,100,000 18,650,000
Cash 50,000 Drawings (3,930,000)
14,720,000
Creditors 4,350,000
Suspense account 580,000
19,650,000 19,650,000

When the above statement was prepared there was still a difference in the trial balance, and it was necessary to open a suspense account for the amount show.
Subsequently the following errors have been discovered:

  1. The balance of shs 140,000 on Eliza’s account in the sales ledger had been brought forward as shs 14,000.
  2. The sales day book had been undercast by shs 386,000.
  3. A new cash register costing shs 310,000 had been debited to purchases account instead of fixtures and fittings.
  4. Depreciation of equipment had been entered in the profit and loss account as shs 1,724,000 instead of shs 1,274,000.
  5. Discounts allowed of shs 65,000 had been posted to the credit of discount received account.

Required:

  1. Provide journal entries necessary to correct the errors;
  2. Produce a corrected balance sheet showing the amended balance on the suspense account.

  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION SEVEN

An inexperienced book-keeper has drawn up a trial balance for the year ended 30 June 2017:

Details DR. TZS CR. TZS
Provision for doubtful debts 200
Bank overdraft 1,654
Capital 4,591
Creditors 1,637
Debtors 2,983
Discount received 252
Discount allowed 733
Drawings 1,200
Office furniture 2,155
General expenses 829
Purchases 10,923
Returns inwards 330
Rent and rates 314
Salaries 2,520
Sales 16,882
Stock 2,418
Provision for depreciation of furniture 364
24,938 25,002

Further investigation of the suspense account, ascertained above, reveals the following errors:

  1. Goods bought from Kaleb amounting to shs 13 had been posted to his account as shs 33.
  2. Furniture which had cost shs 173 had been debited to the general expense account.
  3. An invoice from Suppliers Ltd for shs 370 had been omitted from the purchase account, but credited to Suppliers Ltd’s account.
  4. Sales on credit to Tumaini Ltd for shs 450 had been posted to the sales account, but not to the debtors ledger.
  5. The balance on the capital account had been incorrectly brought forward in the ledger, and should have been shs 4,291.
  6. An amount of shs 86 received from Msifuni, a debtor, in settlement of his account had been treated as a cash sale.
  7. Discount allowed has been undertotalled by shs 35.

Required:

  1. Draw up a ‘corrected’ trial balance, debiting or crediting any residual error to a suspense account.
  2. Prepare journal entries correcting each of the above errors and write up the suspense account.

  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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We have to re-arrange the Trial Balance in order to arrive at a true difference which is to be sent to Suspense account.
Press then go back to the Trial Balance to select correct side of each account. NOTE: Red color stands for "Incorrect".

QUESTION EIGHT

At the end of the financial year the totals of the trial balance of Kaswamila failed to agree and the difference, shs 213,000, was credited to a suspense account pending investigation.
Subsequently, the following errors were discovered:

  1. Rates, shs 240,000, paid in advance at the end of the previous year had not been brought down on the rates account as an opening balance.
  2. A new machine (cost shs 1,100,000) acquired for use in the business had been debited to purchases.
  3. The sales daybook had been under-added by shs 500,000.
  4. Surplus items of machinery (held as fixed assets) had been sold at their book value of shs 400,000 on credit and this transaction had been recorded as a normal sale in the sales book.
  5. Goods, bought from a supplier for shs 15,000, had been credited to his account as shs 51,000.
  6. Discount allowed, shs 9,000, had been correctly recorded in the cash book but had not been posted to the customer’s account.
  7. An amount of shs 60,000, owed by a customer, had been missed off the schedule of debtors balances used as the debtors figure in the trial balance.
  8. Goods returned by a credit customer had been correctly recorded in the sales return daybook as shs 20,000, but had been debited to that customer’s account.

Required:

Post the appropriate correcting entries in the suspense account in order to eliminate the balance.


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION NINE


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION TEN


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION ELEVEN


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION TWELVE


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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QUESTION THIRTEEN


  • Updated: 18 Jul 20
  • |
  • Attempts: 108
  • |
  • Correct: 48

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