BANK RECONCILIATION

1) The following attempt at a bank reconciliation statement has been prepared by Q

Limited:
$
Overdraft per bank 38,600
statement
Add: deposits not credited 41,200
79,800
Less: outstanding cheques 3,300
Overdraft per cash book $76,500

Assuming the bank statement balance of $38,600 (O/D) to be correct, what

should the cash book balance be?
a) $76,600 overdrawn -38.600+41.200-3.300=-700 overdrawn
b) $5,900 overdrawn
c) $700 overdrawn
d) $ 5,900 cash at bank

2) After checking a business cash book against the bank statement, which of the
following items could require an entry in the cash book?
1. Bank charges
2. A cheqeue from a customer which was dishonoured
3. Cheque not presented
4. Deposits not credited dishonoured cheque = cek ditolak, bank ga mau bayar
oustanding cheque = unpresented cheque
5. Credit transfer entered in bank statement
6. Standing order entered in bank statement

a) Items 1,2,5 and 6 only

b) Items 3 and 4 only
c) Items 1,3,4 and 6 only
d) Items 3,4,5 and 6 only

3) In reconciling a business cash book with the bank statement, which of the
following items could require a subsequent entry in the cash book?
Error
1. Cheques presented after the date of the bank statement
2. A cheque from a customer that has been dishonoured
3. An error by the bank
4. Bank charges
5. Deposits credited after the date of the bank statement
6. Standing order payment entered in the bank statement
 a) Items 2,3,4 and 6 only
b) Items 1,2,5 and 6 only
c) Items 2, 4 and 6 only
d) Items 1,3 and 5 only

4) A business has a debit balance on its cash book of $148.00 but the bank statement
shows a different balance. The following items have also been discovered:
● The bank statement shows that there were bank charges for the period of $10
which have not been recorded in the cash account;
● A standing order payment for $25 has also been mistakenly omitted from the
cash account;
● Cheques totaling $125 had been written and posted to suppliers but had not
yet been presented;
● A cheque for $85 had been paid into the bank but was still outstanding.

What is the balance on the bank statement?

a) $73 Cash book = 148 - 10 -25 = 113
b) $113
c) $153
d) $223

5) The bank statement shows a balance at the bank of $1,360, whilst the cash book
balance on the same date is $1,250. This discrepancy can be explained by:
a) Uncredited lodgment of $110
b) Bank charges of $110 not yet recorded in the cash book
c) Bank interest received of $55 credited in the cash book
d) A dishonored cheque for $55 which the business did not know about until it was
returned, after the date of the bank statement

6) On 31 December Jolyon’s cash book shows a balance of $293. The bank statement
for 31 December shows a balance of $151. The difference could be due to:
a) Uncredited lodgments for which adjustment to the cash book is necessary
b) Uncredited lodgments for which no adjustment to the cash book is necessary
c) Bank interest received as revealed by the bank statement, for which
adjustment to the cash book is necessary
d) Bank interest received as revealed by the bank statement, for which no
adjustment to the cash book is necessary
7) At 1 March, the cash book shows a balance of $850. Transactions during the month
are:
Cash sales 230
Credit sales 1,95
Cheques written 1,20
Remittance from debtors 1,50

The cash book balance at 31 March is:

a) $1,380 dr = 850 + 230 + 1.500
b) $1,830 cr = 1.200
c) $3,100 selisih = 1.380
d) $3,330

8) Which of the following statements is true?

Uncredited lodgments:
a) Constitute an error in the cash book
b) Constitute an error in the bank statement
c) Result from the cash book being out of date compared with the bank
statement
d) Result from the bank statement being out of date compared with the cash
book.

9) How often should a bank reconciliation statement be prepared for a large retail
group?
a) Annually
b) Monthly
c) Daily
d) Weekly

10) Which of the following would not affect bank reconciliation?

a) Dishonored cheqeue
b) Discount received
c) Bank interest
d) Lodgments not presented

11) A bank reconciliation revealed the following differences between the cash book
and the bank statement
1. Outstanding lodgments of $369
2. Un presented cheques of $743
3. A direct debit of $27 not entered in the cash book

Balance as per cash book (unadjusted bal.) XX

Add: Direct Credits XX XX
Less: Direct debits XX
Standing order payments XX
Dishonouredcheques XX (XX)
Adjusted balance XX
 If the balance shown by the bank statement is $514 overdrawn, what is the
unadjusted balance in the cash book?
a) $113 credit
b) $167 debit -514+369-743 = -888
-888 + 27 = -861
c) $861 credit
d) $915 credit klo adjusted balance

12) Your cash book at 31 December 1993 shows a bank balance of $565 overdrawn.
On comparing this with your bank statement at the same date, you discover that:
1. A cheque for $57 drawn by you on 29 December 1993 has not yet been
presented for payment;
2. A cheque for $92 from a customer, which was paid into the bank on 24
December 1993, has been dishonored on 31 December 1993

The correct bank balance to be shown in the SOFP at 31 December 1993 is:
a) $714 overdrawn
bank balance tapi masih di cash book!
b) $657 overdrawn -565-92=-657
c) Rs 473 overdrawn
d) Rs 53 overdrawn

13) At 31 December 1997, a customer’s bank statement shows that his bank account
is overdrawn by $10,136. At that date, cheques drawn on his account, but not yet
presented to the bank, totaled $4,998 and cheques paid into his account, but not
yet credited by the bank, totaled $5,896. His bank statement shows that interest of
$181 has been charged; but this has not yet been entered in the cash book.
What is the correct bank balance to be shown in the SOFP at 31 December 1997?
a) $9,057 overdrawn Balance as per Bank Statement (Unadjusted) XX
b) $9,238 overdrawn Add: Outstanding lodgments /un-credited cheques XX
Less: Un-presented cheques (XX)
c) $10,853 overdrawn Add/Less: Errors X/(X)
d) $11,034 overdrawn Balance as per cash book (adjusted) XX
bank balance di cash book!
-10.136-4.998+5.896 = -9.238 (bank stat.)
14) A bank reconciliation statement can best be described as:
a) A necessary checking exercise normally carried out by the auditors of the bank
b) An essential part to the internal control system of the business
c) An integrated part of the double entry bookkeeping system
d) An exercise designed to prove that the closing bank balance per the bank
statements can be reconciled with the opening bank balance

15) Which of the following correctly defines a ‘bank statement?

a) A statement produced to agree the balance at bank with the cash book
balance for a business
b) One sent to customers of a bank itemizing the account balances, payments
and receipts for an account in a month
c) A record showing the cash balance of a business
d) An analysis of payments and receipts for a business
16) Which of the following will not appear in a bank reconciliation statement?
a) Unpresented cheques
b) Undepsoited receipts
c) Journal entries
d) Bank errors

17) A company’s cash book shows a debit balance of $700. The bank statement as at
the same date shows an overdrawn balance of $210. Which one of the following
timing differences could account for the discrepancy?
a) Cheques drawn but not yet presented amounted to $490
b) Cheques received but not yet cleared amounted to $490
c) Cheques drawn but not yet presented amounted to $910
d) Cheques received but not yet cleared amounted to $910

18) A company’s bank statement shows $715 direct debits and $353 investment
income not recorded in the cash book. The bank statement does not show a
customer’s cheque for $875 entered in the cash book on the last day of the
accounting period.
If the cash book shows a credit balance of $610 what balance appears on the
bank statement?
Cash book = -610-715+353 = -972
a) $97 overdrawn
Balance per bank statement:
b) $627 overdrawn x + 875 = -972
c) $1,123 overdrawn x = -972-875 = -1847
d) $1,847 overdrawn

19) A company’s bank statement shows an overdraft of $197 at the end of month 1.
The statement includes bank charges of $17 which have not yet been recorded in
the company’s cash book. The statement does not include a cheque for $340 paid
to a supplier, nor an amount of $216 received from a debtor; both of these amounts
appear in the bank statement for month 2.
If the company prepares a SOFP as at the end of month 1, the figure for bank
overdraft should be:
a) $56
-197 - 340 + 216
b) $73
c) $304
d) $321

20) What was the original (unadjusted) cash book balance as at 30 June?
a) $322 debit
b) $322 credit
c) $416 debit
d) $416 credit
ACCRUALS & PREPAYMENTS

1) A business compiling its accounts for the year to 31 January each year, pays rent
quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. After
remaining unchanged for some years, the rent was increased from $24,000 per
year to $30,000 per year as from 1 July 20X3.
Which of the following figures is the rent expense which should appear in the
Statement of Profit or Loss for the year ended 31 January 20X4?
Feb-Apr
a) $27,500 Mei-Juli
Agt-Okt
b) $29,500 Nov-Jan
c) $28,000 awal 24.000 / 12 = 2.000/bl
baru 30.000 / 12 = 2.500/bl start 1 july!
d) $29,000 Feb-Juni = 2.000 x 5 = 10.000
Juli-Jan = 2.500 x 7 = 17.500
Total 27.500

2) The electricity account for the year ended 30 June 20X3 was as follows:

$
Opening balance for electricity accrued at 1 July 20X2 300
Payments made during the year:
1 August 20X2 for three months to 31 July 20X2 600 1/3 = 200
1 November 20X2 for three months to 31 October 20X2 720
1 February 20X3 for three months to 31 January 20X3 900
30 June 20X3 for three months to 30 April 20X3 840

Which of the following is the appropriate entry for electricity?

Accrued at June 20X3 Charged Statement of Profit or Loss
for year ended 30 June 20X3
a) $Nil $3,060
b) $460 $3,320
c) $560 $3,320
d) $560 $3,420

3) At 31 March 20X3, accrued rent payable was $300. During the year ended 31
March 20X4, rent paid was $4,000, including an invoice for $1,200 for the quarter
ended 30 April 20X4. april 1/3 = 400
What is the Statement of Profit or Loss charge for rent payable for the year ended
31 March 20X4?
a) $3,300 4k -400-300 = 3.300
b) $3,900
c) $4,100
d) $4,700
4) The annual insurance premium for S Ltd for the period 1 July 20X3 to June 20X4 is
$13,200, which is 10% more than the previous year. Insurance premiums are paid
on 1 July.
What is the Statement of Profit or Loss charge for insurance for the year ended 31
December 20X3?
a) $11,800 previous year 100/110 x 13.200 = 12.000
6/12 x 12.000 = 6.000
b) $12,540
c) $12,600 6/12 x 13.200 = 6.600
d) $13,200
= 12.600
5) Arlene has paid $5,520 for rent for the six month period to 31 August 20X1.
What accrual or prepayment is required when preparing accounts for the year
ended 30 June 20X1?
a) A prepayment of $920 jul - agust = 2/6 x 5.520
b) A prepayment of $1,840
c) An accrual of $920
d) An accrual of $1,840

6) April 2005 a company pays rent of $4,950 for the year ended 31st March 2006.
There was an increase of 10% on the charge for the previous year. In the
company’s Statement of Profit or Loss account for the year ended 31st December
2005, what would be the charges for rent? previous charge 100/110 x 4.950 = 4.500
3/12 x 4.500 =1.125
9/12 x 4.950 = 3.712,5
Answer: ________________
= 4.837,5
7) A business starts trading on 1st May 2000. The table shown rent paid on the
premises:

Date Period Amount ($)

2 May 2000 1 May -30 June 1000
3 July 2000 1 July – 30 September 1500
2 October 2000 1 October – 31 1500
December
4 January 2001 1 January – 31 March 1560
1 April 2001 1 April – 30 June 1560 exp 1/3 = 520

Which amount should be shown in the accounts for the year ended 30 April 2001for
1.040
rent prepayment? _________________________
8) A tenant pays annual rent of $6,000. Payment is made quarterly in advance on 1
January, 1 April, 1 July and 1 October. Which of the following should be included
in his accounts for the year ended 31 October 2001?
a) $500 Accrual
b) $500 Prepayment
c) $1,000 Accrual
d) $1,000 Prepayment

9) A company’s accounting year-end is 31st December. It always pays its insurance

premiums annually in advance, on the due date 1 September each year. During
the last few years the following premiums have been paid:
Year -1 $2400
Year -2 $2760
Year -3 $3840

What will be charged for insurance in the company’s Statement of Profit or Loss
account for year 3? prepaid, expense?
2.760 :12 x 8 = 1.840
3.840 : 12 x 4 = 1.280
Answer: _______________________ Total 3.120

10) X Ltd rents it’s building to Y Ltd. At 31st December 1998, Y Ltd owed $4500 for rent,
but at 31st December 1999, had paid $3200 in advance. During the year X Ltd had
received $17,100 in rental from Y Ltd. What is the rental income to be shown
in the Statement of Profit or Loss of X Ltd for the year ended 31st December 1999?

Answer: ___________________

11) You are given the following extract from an electricity account for the year ended
30 June 2000:
Electricity Account
Balance b/d (standing charges) $74 Balance b/d (meter 375
usage)
Bank $394
Bank $427
Bank $507
Bank $670

The last bill received and paid was for $670 consisting standing charges of $180 for
the three months to 31st August 2000 and meter charges for the three months to
31st May 2000. The share for the electricity to the Statement of Profit or Loss for the
year ended 30 June 2000 is:
12) Jennifer is preparing her year-end accounts and she has to deal with a
prepayment for rent.
Which of the following statements is correct?
a) The prepayment will increase the charge to the Statement of Profit or Loss
b) The prepayment will reduce the charge to the Statement of Profit or Loss
c) The prepayment has no effect on the Statement of Profit or Loss
d) The prepayment will only affect the Statement of Profit or Loss

13) When he prepared his draft accounts, Ralph included $1,400 as an accrual for rent
for two months. However he should have provided for only one month's rent.
How will Ralph's current liabilities be affected when he adjusts the accrual?
a) Reduced by $1,400
b) Increased by $1,400
c) Reduced by $700
d) Increased by $700
Beban yang masih harus dibayar: beban xxx, utang xxx
14) Expenses of the period, which are unpaid at the end of the period, should be?
a) Debited to Statement of Profit or Loss and included in the statement of
financial position as current liability
b) Shown in the Statement of Profit or Loss as an expense and deducted from
statement of financial position cash figure at the end of the year
c) Shown as liability the statement of financial position only
d) Shown as a prepayment in the statement of financial position

15) Beth’s draft accounts for the year to 31st October 20X5 report a loss of $1,486. When
she prepared the accounts, Beth did not include an accrual of $1,625 and a
prepayment of $834.
What is Beth’s profit or loss for the year to 31st October 20X5 following the inclusion
of the accrual and prepayment?
a) A loss of $695
b) A loss of $2,277
c) A loss of $3,945
d) A profit of $1,807

16) Joan’s draft year end accounts were prepared including prepayment for rent of
$970. The prepayment should have been $1,170.
When the error is corrected, how will the net profit be affected?
a) Net profit will decrease by $200
b) Net profit will increase by $200
kurang 200
c) Net profit will decrease by $1,170 dibenerin jadi ikut naik si prepaid, jadinya expense berkurang 200,
jadi profit naik 200
d) Net profit will increase by $1,170
17) Alan prepared his draft end year accounts, but did not adjust these for a
prepayment of $1,500 and an accrual of $400.
How will Alan’s profit and net assets be affected by including the prepayment and
accrual?
NET PROFIT WILL NET ASSETS WILL
a) Increase by $1,100 Reduce by $1,100
b) Reduce by $1,900 Increase by $1,900
c) Increase by $1,100 Increase by $1,100
d) Reduce by $1,900 Reduce by $1,900

18) A company pays rent quarterly in arrears on 1 January, 1 April, 1 July and 1
October each year. The rent was increased from $90,000 per year to $120,000 per
year as from 1 October 20X2. What rent expense and accrual should be included
in the company's financial statements for the year ended 31 January 20X3?
Rent Expense Accrual

a) 100,000 20,000
b) 100,000 10,000
c) 97,500 10,000
d) 97,500 20,000

19) At 31 March 20X2 a company had oil in hand to be used for heating costing $8,200
and an unpaid heating oil bill for $3,600. At 31 March 20X3 the heating oil in hand
was $9,300 and there was an outstanding heating oil bill of $3,200. Payments made
for heating oil during the year ended 31 March 20X3 totalled $34,600.
Based on these figures, what amount should appear in the company's Statement
of Profit or Loss for heating oil for the year?
a) $23,900
b) $36,100
c) $45,300
d) $33,100

20) A company has sublet part of its offices and in the year ended 30 November 20X3
the rent receivable was:
Until 30 June 20X3 $8,400 per year
From 1 July 20X3 $12,000 per year
Rent was paid quarterly in advance on 1 January, April, July and October each
year. What amounts should appear in the company’s financial statements for the
year ended 30 November 20X3?
Rent Receivable SOFP
$ $
a) 9,900 2,000 in sundry payables
b) 9,900 1,000 in sundry payables
c) 10,200 1,000 in sundry payables
d) 9,900 2,000 in sundry receivables
CORRECTION OF ERRORS

1) A trial balance shows a total of debits of $347,800 and a total of credits of 362,350.
After adjusting for the following errors, what is the balance on the suspense
account?
(1) A credit sale of $3,670 was incorrectly entered in the sales day book as $3,760.
(2) A non-current asset with a carrying value of $7,890 was disposed of for $9,000.
The only accounting entry was to debit cash.
(3) The allowance for receivables was increased from $8,900 to $10,200. The
allowance account was debited in error.

a) $26,150 debit
b) $26,060 debit
c) $26,240 debit
d) $2,950 credit

2) The trial balance of Kelvin does not balance. Which two of the following errors
could explain this, assuming that Kelvin maintains control accounts for its
receivables and payables within the double entry system?
(1) The sale day book was under cast by $100.
(2) Discounts allowed were debited to discount received account.
(3) An opening accrual was omitted from the rent account.
(4) The debit side of the cash account was under cast.

a) 1 and 2
b) 2 and 3
c) 3 and 4
d) 1 and 4

3) The trial balance of MHSB does not balance at the year end. What type of error
may explain this?
a) Extraction error
b) Error of commission
c) Compensating error

4) The trial balance of Bob Butler shows total debits of $125,819 and total credits of
$118,251. Which of the following explains the difference in full?
a) Discount allowed of $3784 have been shown on the wrong side of the trial
balance.
b) Discount received of $ 3,784 have been credited to payables ledger control
account.
c) The sales day book has been undercast by $7,568.
d) A opening accrual of $7,568 has been omitted from rental expense account.
opening accrual = cr
5) Which of the following journals is correct according to its narrative?
Debit Credit
$ $
a) Mr Smith personal account 100,000
Directors’ remuneration 100,000
Bonus allocated to account of managing director (Mr Smith)
b) Purchases 14,000
Wages 24,000
Repairs to building 38,000
Transfer of costs of repairs to buildings carried out by
company employees using material from inventory
c) Discount allowed 2,800
Discount received 2,800
Correction of error: discounts allowed total incorrectly
Debited to discounts received account.
d) Suspense account 20,000
Rent receivable 10,000
Rent payable 10,000
Correction of error: rent received credited in error to rent
Payable account.

6) The trial balance of Koi did not balance, and a suspense account was opened for
the difference. Which of the following errors would require an entry to the suspense
account in correcting them?
1. A cash payment to purchase a motor van had been correctly entered in the
cash book but had been debited to the motor expense account.
2. The debit side of wages account had been undercast.
3. The total of discounts allowed column in the cash book had been posted to the
receivables ledger control account correctly and credited to the discounts
received account.
4. A cash refund to a customer had been recorded by debiting the cash book
and crediting the customer’s account.

a) 1 and 2
b) 2 and 3
c) 3 and 4
d) 2 and 4

7) A company’s trial balance failed to agree, and a suspense account was opened
for the difference. Subsequent checking revealed that discount allowed of $13,000
has been credited to the discount received account and an entry on the credit
side of the cash book for the purchase of some machinery costing $18,000 had not
been posted to plant and machinery account.
 Which two of the following journal entries would correct the errors?
Debit Credit
$ $
1. Discounts allowed 13,000
Discounts received 13,000
2. Discounts allowed 13,000
Discounts received 13,000
Suspense account 26,000
3. Suspense account 26,000
Discounts allowed 13,000
Discounts received 13,000
4. Plant and machinery 18,000
Suspense account 18,000
5. Suspense account 18,000
Plant and machinery 18,000

a) 1 and 4
b) 2 and 5
c) 2 and 4
d) 3 and 5

This information is relevant to the following TWO questions:

A company’s draft financial statements for 20X5 showed a profit of $630,000.
However, the trial balance did not agree, and a suspense account appeared in the
company’s financial statements.
Subsequent checking revealed the following errors:
1. The cost of an item of plant $48,000 had been entered in the cash book and in the
plant account as $4,800. Depreciation at the rate of 10% per year ($480) had been
charged.
2. Bank charges of $440 appeared in the bank statement in December 20X5 but had
not been entered in the company’s records.
3. One of the directors paid $800 due to a supplier in the company’s payables ledger
by a personal cheque. The bookkeeper recorded a debit in the supplier’s ledger
account but did not complete the double entry for the transaction (The company
does not maintain a payables ledger control account)
4. The payment side of the cash book had been understated by $10,000.

8) Which of the above items would require an entry to the suspense account in
correcting them?
a) All four items
b) 3 and 4 only
c) 2 and 3 only
d) 1, 2 and 4 only
9) What would the company’s profit become after the correction of above errors?
a) $634,760
630.000-(4800-480)-440
b) $624,760 profit-depresiasi-bank
c) $624,440
d) $625,240

10) The draft accounts of Galahad’s business for the year ended 31 July 20X0 show a
profit of $54,250 prior to the correction of the following errors:
1. Cash drawings of $250 have not been accounted for.
2. Debts amounting to $420, which were provided against in full during the year,
should have been written off as irrecoverable.
3. Rental income of $300 has been classified as interest receivable.
4. On the last day of accounting period, $200 in cash was received from a
customer, but no bookkeeping entries have yet been made.

What is the correct profit of the business for the year?

a) $53,580
b) $53,830
c) $54,250
d) $55,830

11) The trial balance of Flo, a limited liability company, does not agree and a suspense
account has been opened. Inventory bought at a tax inclusive cost of $4,700 has
been credited to the payables ledger control account. The sale tax, at 17.5% has
been recorded in the sales tax account and the total $4,700 has been recorded in
the purchases account.
What entry is required to correct the error?
a) Dr Payables ledger control account $700 Cr Suspense account $700
b) Dr Payables ledger control account $822.50 Cr Suspense account $822.50
c) Dr Suspense account $700 Cr Purchases $700
d) Dr Suspense account $822.50 Cr Purchases $822.50

12) Weagan’s trial balance at 31 October 20X9 is out of agreement, with the debit side
totalling $500 less than the credit side. During November, the following errors
discovered:
● The credit side of the sales account for October had been undercast by $150.
● Rent received of $240 had been credited to rent payable account.
● The allowance for receivables, which decreased by $420, had been recorded
in the allowance for receivables account as an increase.
Following the correction of these errors, the balance on the suspense account
would be:
a) $190 Cr
b) $670 Cr
c) $1,190 Cr
d) $1,490 Dr
13) Which ONE of the following is an error of principle?
a) A gas bill credited to the gas account and debited to the bank account.
b) The purchase of a non-current asset credited to the asset at cost account and
debited to the supplier’s account
c) The purchase of a non-current asset debited to the purchases account and
credited to the supplier’s account
d) The payment of wages debited and credited to correct accounts, but using the
wrong amount.

14) The trial balance of C did not agree, and a suspense account was opened for the
difference. Checking in the bookkeeping system revealed a number of errors:
Error
1. $4,600 paid for motor van repairs was correctly treated in the cash book but
was credited to motor vehicles asset account.
2. $360 received from Brown, a customer, was credited in error to account of
Green.
3. 9,500 paid for rent was debited to rent account at $5,900.
4. The total of the discounts allowed column in the cash book had been debited
in error to the discounts received account.
5. No entries had been made to record cash sale of $100.

Which of the following errors above would require an entry to the suspense
account as part of the process of correcting them?
a) Errors 3 and 4 only
b) Errors 1 and 3 only
c) Errors 2 and 5 only
d) Errors 2 and 3 only

15) Drive gives as a cash discount of $40 to a customer. The discount is credited to the
discounts allowed account.
The effect of recording the discount in this way is that profit will be
a) Correct
b) Overstated by $80
c) Understated by $80
d) Understated by $40
16) A suspense account was opened when a trial balance failed to agree. The
following errors were later discovered:
Error
1. A gas bill of $420 had been recorded in Gas account as $240.
2. Discount of $50 given to a customer had been credited to Discounts Received.
3. Interest received of $70 had been entered in the bank account only.
The original balance on the suspense account was:
a) debit $210
b) credit $210
c) debit $160
d) credit $160

17) The book-keeper of High Hurdles was instructed to make a contra entry for $270
between the supplier account and the customer account for Greyfold. He
recorded the transaction by debiting the customer account and crediting the
supplier account with $270. The business accounts do not include control
accounts.
Which of the following statements is correct?
a) Unless the error is corrected, profit will be over-stated by $540
b) Unless the error is corrected, net assets will be over-stated by $270
c) Unless the error is corrected, net assets will be over-stated by $540
d) The errors should be corrected, but neither the profit nor the net assets are over-
stated

18) The debit side of a trial balance totals $800 more than the D'edit side. Which one
of the following errors would fully account for the difference?
a) Omission $400 paid for plant maintenance has been correctly entered in the
cash book and credited to the plant asset account.
b) Discount received $400 has been debited to discount allowed account.
c) A receipt of $800 for commission receivable has been omitted from the
records.
d) The petty cash balance of $800 has been omitted from the trial balance

19) When Q's trial balance failed to agree, a suspense account was opened for the
difference. The trial balance totals were:
Debit $ 864,390
Credit $ 860,930
The company does not have control accounts for its receivables and payables
ledgers. The following errors were found:
1. In recording an issue of shares at par, cash received of $333,000 was credited
to the ordinary share capital account as $330,000
2. Cash $2,800 paid for plant repairs was correctly accounted for in the cash book
but was credited to the plant asset account.
3. The petty cash book balance $500 had been omitted from the trial balance.
 4. A cheque for $78,400 paid for the purchase of a motor car was debited to the
motor vehicles account as $87,400.
5. A contra between the receivables ledger and the payables ledger for $1,200
which should have been credited in the receivables ledger and debited in the
payables ledger was actually debited in the receivables ledger and credited
in the payables ledger.

Which of these errors will require an entry to the suspense account to correct
them?
a) All five items
b) 3 and 5 only
c) 2,4 and 5 only
d) 1, 2, 3 and 4 only

20) What will the balance on the suspense account be after making the necessary
entries to correct the errors affecting the suspense account?
a) $2,940 Debit
b) $15,560 Credit
c) $13,640 Debit
d) $3,440 Debit