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27.9A Chi Knitwear Ltd is an old-fashioned business with a handwritten set of books. A trial bal ance is extracted at the end of

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27.9A Chi Knitwear Ltd is an old-fashioned business with a handwritten set of books. A trial bal ance is extracted at the end of each month, and an income statement and a balance sheet are com puted. This month, however, the trial balance will not balance, the credits exceeding debits by 1,53% You are asked to help and after inspection of the ledgers discover the following errors. (i) A balance of 87 on a debtor's account has been omitted from the schedule of debtors, the total of which was entered as accounts receivable in the trial balance. (ii) A small piece of machinery purchased for 1,200 had been written off to repairs. (iii) The receipts side of the cash book had been undercast by 720. (iv) The total of one page of the sales day book had been carried forward as 8,154, whereas the correct amount was 8,514. (v) A credit note for 179 received from a supplier had been posted to the wrong side of his account (vi) An electricity bill in the sum of 152, not yet accrued for, is discovered in a filing tray. (vii) Mr Smith, whose past debts to the company had been the subject of a provision, at last paid 731 to clear his account. His personal account has been credited but the cheque has not yet passed through the cash book. Required: (a) Write up the suspense account to clear the difference, and (b) State the effect on the accounts of correcting each error. (Association of Chartered Certified Accountants)

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