Answer Happy

SECTION B (30 marks) Answer two from three questions Question 2 (15 marks) 2 A trial balance failed to agree and the difference of £180 was entered in a suspense account: Suspense account £ £ Balance b/d 180 Upon investigation, the following errors were found: i. A amount of £180 had been debited to the rent received account in error. The corresponding entry has been correctly recorded in the cash at bank account. Motor expenses of £320 had been debited to the motor vehicles at cost account. ii. iii. An amount of £530 for electricity was incorrectly recorded in the heat and light account as £350. iv. A credit sale of £250 was not recorded in the ledgers. V. Drawings of £500 were correctly recorded in the cash at bank account, but recorded as a debit in the general expenses account
V. Drawings of £500 were correctly recorded in the cash at bank account, but recorded as a debit in the general expenses account. 2a) Refer to the errors identified (i. through to v.). In each case you are to explain how each of the errors would affect both gross and net profits before any necessary corrections are made. (12 marks) 2b) Complete the suspense account, by identifying the errors that result in the credit balance of £180 being eliminated. (3 marks) Or ... 3