Uploaded by Annur Momac

#4EXAMPLE OF ERRORS

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Example 1
You are to enter up the necessary accounts for the month of May from the following
information relating to a small printing firm. Then balance off the accounts and extract a
trial balance as at 31 May 2016
2016
May 1 Started in business with capital in cash of £800 and £2,200 in the bank.
2 Bought goods on credit from the following persons: J Ward £610; P Green £214;
M Taylor £174; S Gemmill £345; P Tone £542.
4 Sold goods on credit to: J Sharpe £340; G Boycott £720; F Titmus £1,152.
6 Paid rent by cash £180.
9 J Sharpe paid us his account by cheque £340.
10 F Titmus paid us £1,000 by cheque.
12 We paid the following by cheque: M Taylor £174; J Ward £610.
15 Paid carriage by cash £38.
18 Bought goods on credit from P Green £291; S Gemmill £940.
21 Sold goods on credit to G Boycott £810.
31 Paid rent by cheque £230.
Example 2.
Enter the following transactions of an antiques shop in the accounts and extract a trial balance as
at 31 March 2018.
2018
March 1 Started in business with £8,000 in the bank.
2 Bought goods on credit from the following persons: L Frank £550; G Byers £290; P Lee
£610.
5 Cash sales £510.
6 Paid wages in cash £110.
7 Sold goods on credit to: J Snow £295; K Park £360; B Tyler £640.
9 Bought goods for cash £120.
10 Bought goods on credit from: G Byers £410; P Lee £1,240.
12 Paid wages in cash £110.
13 Sold goods on credit to: K Park £610; B Tyler £205.
15 Bought shop fixtures on credit from Stop Ltd £740.
17 Paid G Byers by cheque £700.
18 We returned goods to P Lee £83.
21 Paid Stop Ltd a cheque for £740.
24 B Tyler paid us his account by cheque £845.
27 We returned goods to L Frank £18.
30 G Prince lent us £1,000 by cash.
31 Bought a van paying by cheque £6,250.
Example 3
Salmaan’s business has the following balances on its ledger accounts as at 1 January 2019:
Accounts
Balance
TZS
Bank loan
12,000,000.00
Cash
11,700,000.00
Capital
13,000,000.00
Local business taxes
1,880,000.00
Trade accounts payable
11,200,000.00
Purchases
12,400,000.00
Sales
14,600,000.00
Sundry payables
1,620,000.00
Trade accounts receivable
12,000,000.00
Bank loan interest
1,400,000.00
Other expenses
11,020,000.00
Vehicles
2,020,000.00
During the month the business made the following transactions:
Jan 4 Purchase of goods for TZS 1000,000, half for cash and half on credit.
Jan 6 Made TZS 1,040,000 sales, TZS 800,000 of which was for credit.
Jan 10 Paid wages to shop assistants of TZS 260,000 in cash.
Required:
a) Draw up trial balance as at 1 January 2009.
b) Draw up trial balance as at the end of 31 January 2009.
Example 4
Show the journal entries necessary to correct the following errors:
a) A business receive an invoice of TZS 400,000 from a supplier Suheyl ltd which was
omitted entirely.
b) A sale of goods, TZS 200,000 to Sada was entered in error in Sule’s a/c.
c) The sales a/c is overcast by TZS 100,000, AS also wages a/c.
d) The purchase of a motorcar, TZS 4,000,000 is debited to the purchases a/c instead of being
debited to a motorcar a/c.
e) A sale of TZS 340,000 to A Salmaan was entered in the books as 240,000.
f) A credit purchase from Marium costing TZS 485,000 was entered in the books as TZS
458,000
Example 5.
Write out the journal entries which would correct these errors.
a) A business receives an invoice for 350,000/= from a supplier which was omitted from the
books entirely.
b) Repairs worth 240,000/= were incorrectly debited to the non-current asset(machinery)
account instead of the repairs account
c) The accountant of a business reduces cash sales account by 420,000/= because he was not
sure what the 420,000/= represented. In fact, it was a withdrawal on account of profit.
d) Telephone expenses of 320,000/= are incorrectly debited to the electricity account.
Example 6
While extracting the trial balance of Rehema Coy as at 31 December 2009 it was observed that the
total debits exceeded the total credits by 47,600,000/=.
Investigation revealed the following errors:
a. Sales had been overcast by 3,000,000/=
b. Tsh 4,400,000 received from Hamza as a debtor had been debited to his account.
c. A cash purchase of Tsh 464,000 had been recorded in the cash book only
d. A payment by Bi Asha (a debtor) of 30,000,000/= by a direct bank transfer had not been
entered in the debtor’s account
e. Return outward account had not been credited with amount of 12,264,000/=
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