Gail Dawson is the owner of a retail business. She has employed an inexperienced bookkeeper to maintain her accounting records.

(a) On 31 March 2016, the end of the business's accounting year, the bookkeeper extracted the following trial balance from the business's records:

Required:
1 A corrected version of Gail Dawson's trial balance dated 31 March 2016 based on the above information, but with an amended figure for the suspense account.

(b) The following errors were found in the accounting system after a corrected version of the trial balance above was prepared.
(1) The total of the sales day book for December 2015 had been overstated by £120.
(2) In January 2016 some new office equipment had been purchased for £360; this had been debited to the purchases account.
{3) A payment by cheque to a creditor, £216, had been entered in the books as £261.
(4) A credit note for £37 sent to a customer had been overlooked.
(5) The owner had withdrawn a cheque for £80 for private use in October 2015; both the bank and drawings account had been credited with this amount.

Required:
In the books of Gail Dawson 2 Journal entries to correct each of these errors.
3 The suspense account. (Start with the amount in the corrected trial balance given in answer to Required 1 above, and include any entries arising from the correction of the errors.)
4 An explanation of the term 'error of commission'. (Give an example of such an error to illustrate your answer.)

Transcribed Image Text:

Trial Balance at 31 March 2016 Dr Cr Non-current assets at cost Provision for depreciation of non-current assets, 1 April 2015 18,300 2,800 Inventory 1 April 2015 31 March 2016 Trade accounts receivable Trade accounts payable 3,700 2,960 1,825 864 Balance at bank (overdrawn) Capital 382 26,860 Drawings 7,740 Sales 26,080 Purchases 18,327 Running expenses 6,904 Allowance for doubtful debts 90 Suspense 16,888 66,860 66,860