Page 312 - Accountancy_F5

Required: prepare

(i) Journal entries to correct the above errors
(ii) Suspense account duly balanced
5. The Trial Balance of Mlalakua Farm as at 30th September 2015 failed to agree
and the difference was placed in the suspense account. Later the following errors
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were discovered:

(a) TZS 350,000 paid to Aggreco Ltd had been debited to purchases.
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(b) A credit note for goods returned to suppliers amounting to TZS 500,000 had
been debited to creditors account and credited to discount allowed account.
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(c) A cash sale of TZS 254,900 had been recorded in sales account as
TZS 524,900

(d) The credit purchase of an office computer for TZS 600,000 had been
journalised through the purchase’s day book.
(e) A discount of TZS 160,000 was allowed to Roza for a prompt payment and
entered in Roza’s account and was not posted in the cash book.
(f) A commission received was TZS 267,000 and had been entered in error in
the sales account.
Required: prepare
(i) Journal entries to correct the errors,
(ii) Suspense account showing the correction of errors.

6. The trial balance of Hapa Kazi Ltd as at 31 May 2021 failed to agree and the
st
difference was posted in a suspense account. On the income statement, the profit
declared was TZS 10,245,000 while the working capital shown in the statement
of financial position was TZS 2,832,000.

The company’s auditor revealed the following errors:
(a) A credit sale of office furniture for TZS 620,000 had been recorded in the
sales day book.

(b) The purchases day book and returns outwards account had both been over
casted by TZS 113,000
(c) Discount received of TZS 25,700 had been credited to the interest revenue
account as TZS 27,500.
(d) A bad debt recovery of TZS 518,000 had been recorded in the cash book
as a receipt from cash sales. The bad debt was written off in 2020.

Student’s Book Form Five
299

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