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Example 9.5
Kilimo Kwanza Ltd extracted a trial balance as of December 31, 2021, and found
a discrepancy between the totals. The difference was posted to a suspense account.
Subsequently, the following errors were identified, which accounted for the imbalance:
January 7, 2021: A total of TZS 65,000, intended for the discount allowed for the
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month, was mistakenly posted to discount received.
March 3, 2021: An amount of TZS 200,000 received from Mtweve was erroneously
posted to the debit side of Mtweve’s account.
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April 4, 2021: A payment of TZS 65,000 made to Makuani was incorrectly posted
to Makuani’s account as TZS 56,000.
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May 5, 2021: Kilimo Kwanza Ltd bought new office furniture costing TZS
2,500,000, but this amount was inaccurately posted to the purchases
account.

July 7, 2021: A payment of TZS 106,000 for the water bill was recorded in the
cash book, but the corresponding double entry was not made.
Required:
(a) Prepare the necessary journal entries to correct these errors.
(b) Show the original difference in the trial balance by preparing a suspense
account.

Solution 9.5 (a)

Kilimo Kwanza Ltd.’s General journal
DR CR
Date Details
TZS TZS
Jan. 7 Discount received account 65,000
Discount allowed account 65,000

Suspense account 130,000
Being amount of discount allowed had been
posted to discount received account duly
corrected.
March 3 Suspense account 400,000

Mtweve account 400,000
Being amount of TZS 200,000 that had been
erroneously debited (instead of being credited)
in Mtweve account now corrected.

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