13

4 Rachel is a trader.
The totals of Rachel’s trial balance prepared on 30 September 2023 did not agree and the
difference was placed in a suspense account.

Rachel later discovered the errors shown in the following table.

REQUIRED

(a) Complete the following table to show the entries required to correct each error. The first one
has been completed as an example.

Entries required to correct the error

Error Debit Credit
Account $ Account $
A payment for rent, $350, had been Rent
350 Wages 350
debited to the wages account. payable

The sales journal for September had ................... .............. ................... ..............
been overcast by $90.
................... .............. ................... ..............

Sales returns, $110, had been ................... .............. ................... ..............

recorded as purchases returns.
................... .............. ................... ..............

................... .............. ................... ..............

................... .............. ................... ..............

A payment for office expenses, $18, ................... .............. ................... ..............

had been recorded in the office
expenses account as $81. ................... .............. ................... ..............

A petty cash book payment, $29, to ................... .............. ................... ..............

Cole, a supplier, had been recorded
in the column for motor expenses. ................... .............. ................... ..............

[9]

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(b) Prepare the suspense account. Include the balancing figure as the original difference on the
trial balance.

Rachel
Suspense account

Date Details $ Date Details $

.......... ....................................... ............... .......... ...................................... ...............

.......... ....................................... ............... .......... ...................................... ...............

.......... ....................................... ............... .......... ...................................... ...............

.......... ....................................... ............... .......... ...................................... ...............

.......... ....................................... ............... .......... ...................................... ...............

.......... ....................................... ............... .......... ...................................... ...............

[5]

Rachel’s draft profit before the errors were discovered was $18 243.

REQUIRED

(c) Calculate Rachel’s profit for the year ended 30 September 2023 after the errors in the table
have been corrected.

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

...................................................................................................................................................

............................................................................................................................................. [5]

(d) State why financial statements may still be reliable even if errors are present.

...................................................................................................................................................

............................................................................................................................................. [1]

[Total: 20]
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4 Asia is a trader. She prepared her trial balance at 31 August 2023. The credit side totalled $273
more than the debit side. Asia placed the difference in a suspense account.

Asia later discovered the following errors.

1 A credit purchase, $112, from Jacques, had been entered twice in the purchases journal.

2 The wages account had been overcast by $300.

3 Cash received, $75, from Savanah, a trade receivable, had only been entered in the cash
book.

4 The total of the sales returns journal for August 2023 of $198, had been credited to both the
sales returns account and the purchases returns account.

5 A payment to Sophie, $93, had been recorded as $39 in Sophie’s account.

REQUIRED

(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.

© UCLES 2023 0452/21/O/N/23

 15

Asia
Journal

Error Details Debit Credit

number $ $

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

................. ...................................................……........ .................…… .................……

[11]

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 16

(b) Prepare the suspense account, including the original difference on the trial balance.

Asia
Suspense account

Date Details $ Date Details $

.......... ......................................... .............. .......... ......................................... ..............

.......... ......................................... .............. .......... ......................................... ..............

.......... ......................................... .............. .......... ......................................... ..............

.......... ......................................... .............. .......... ......................................... ..............

.......... ......................................... .............. .......... ......................................... ..............

[5]

REQUIRED

(c) Complete the following table by placing a tick (3) to show the effect of each error. The first
one has been completed as an example.

Error Error Gross profit Profit for No effect

number the year
+ – + –
1 A credit purchase, $112, from Jacques,
had been debited twice to the purchases 3 3
account.
2 The wages account had been overcast
by $300.
3 Cash received, $75 from Savanah, a
trade receivable, had only been entered
in the cash book.
4 The total of the sales returns journal for
August 2023, $198, had been credited to
both the sales returns account and the
purchases returns account.
5 A payment to Sophie, $93, had been
recorded as $39 in Sophie’s account.
[4]

[Total: 20]

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 18

5 Sunita has prepared a trial balance at 31 December 2023 and a draft income statement for the
year ended 31 December 2023.

Sunita later discovered the following errors.

1 The total of the sales returns journal for November 2023, $3524, had been credited to the
purchases account.

2 The purchases journal for July 2023 had been undercast by $90.

3 The total of the sales journal for May 2023, $19 415, had not been posted to the sales account.

4 A payment received from P. Mattel, $129, had been debited to the account for M. Patel.

5 Capital introduced by Sunita, $5000, had been debited to the bank account but no other entry
had been made.

6 A rent payment, $500, had been posted to the rent expense account as $50.

REQUIRED

(a) Prepare the journal entry to correct error 1 only. A narrative is required.

Sunita
Journal
Error Details Debit Credit
number $ $

1
............... …………………………………………..........….. ...................... ......................

............... …………………………………………..........….. ...................... ......................

............... …………………………………………..........….. ...................... ......................

............... …………………………………………..........….. ...................... ......................

[4]

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 19

(b) Prepare the suspense account. Include the balancing figure as the original difference on the
trial balance.

Sunita
Suspense account
Date Details $ Date Details $

............. .................................. ............. ............. .................................. .............

............. .................................. ............. ............. .................................. .............

............. .................................. ............. ............. .................................. .............

............. .................................. ............. ............. .................................. .............

............. .................................. ............. ............. .................................. .............

............. .................................. ............. ............. .................................. .............

[7]

(c) Calculate the corrected profit figures in the tables below:

(i)

Original gross profit per draft financial statements 66 223

Gross profit for the year after correcting errors

[4]

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 20

(ii)

Original profit for the year per draft financial statements 28 750

Profit for the year after correcting errors

[3]

Sunita’s gross margin is 40%.

REQUIRED

(d) Calculate Sunita’s sales revenue for the year ended 31 December 2023.

...................................................................................................................................................

............................................................................................................................................. [2]

[Total: 20]

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reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.

Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
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© UCLES 2024 0452/22/F/M/24