CIE Accounting Paper-1: Specimen Questions with Answers 144 - 145 of 214

Question number: 144

Short Answer Question▾

Write in Short

Correct the following errors found in the Daniel account and put tick mark in which side suspense account will appear in rectification of these errors:

Posting of suspense account in the rectification of errors.

Find out Debit and creadit

Errors

Particulars

Debit

Credit

i.

Commission $120 paid has been posted twice to commission account.

ii.

The Day Book is totaled $100 short

iii.

Payment of trade expenses $275 entered on the payment side of the cash book is omitted to be posted.

Explanation

finding a Posting of suspense account in the rectification of errors.

Find out Debit and creadit

Errors

Particulars

Debit

Credit

i.

Commission $120 paid has been posted twice to commission account.

ii.

The Day Book is totaled $100 short

iii.

Payment of trade expenses $275 entered on the payment side of the cash book is omitted to be posted.

The suspense account is placed when any unaccounted difference is showed in trial balance. The balance in suspense account is the net effect of all the errors which affect the trial balance. The ‘suspense account’ helps in tallying the balance sheet.

Question number: 145

MCQ▾

Question

The bank statement shows an overdrawn balance of $2500. A cheque for $500 drawn in favour of a creditor has not yet been present for payment. When the creditor presents the cheque for payment the bank balance will be ________

Choices

Choice (4) Response

a.

$2000

b.

$3000 (Overdrawn)

c.

$3000

d.

$2000 (Overdrawn)

Answer

b.

Explanation

The bank statement shows an overdrawn balance of $2500. A cheque for $500 drawn in favour of a creditor has not yet been present for payment. When the creditor presents the cheque for payment the bank balance will be $3000

he creditors are presenting their cheque for payment and balance per pass book

shows a particuler amount in given table

Particulars

Amount $

Amount$

Balance as per pass book

(2500)

Less: Cheque drawn not yet presented for payment

500

500

Overdraft balance as per pass book

2500