Activity 1 - journal entries

Prepare the journal entries necessary to correct the following entries in the general
ledger (narrative not required).

(a) A cash payment of $150, which was analysed under the 'sundry expenses' column in
the cash payments day book was in fact to meet a personal expense of the proprietor.

(b) The cash proceeds from the sale of a second hand computer, $500, had been credited
to the equipment cost account.

(c) An invoice received for the purchase of a replacement computer for office use had not
been entered in a book of original entry ($2,500).
Activity 2 - errors

Identify which of errors listed below will affect the suspense account:

(1) A sales invoice for $500 was entered as a credit note onto the purchase day book. On
the same day a credit note for $500 from a supplier was entered onto the sales day
book.

(2) An invoice for $950 in respect of repairs made to the office interior has been posted to
cleaning by mistake.

(3) An invoice has been entered into the sales day book twice.

(4) A $15,000 business loan received from a friend of the proprietor has been credited to
capital.

(5) The purchase day book has been correctly added up and cross-cast. However, when
the total of $56,789 was posted to the purchase ledger control account the clerk
accidentally entered $57,689 in the purchase ledger control account.
Activity 3 – trial balance

The following trial balance has been incorrectly extracted from the books of F Manning &
Co. Re-draft the trial balance and set up a suspense account:

Incorrect trial balance

Account Debit Credit

$ $
Motor vehicles 15,000
Office equipment 10,000
Opening inventory 30,000
Receivables 20,000
Bank 12,000
Payables 45,000
Loan 20,000
Capital 5,000
Sales 100,000
Purchases 45,000
Expenses 23,000
Drawings 10,000
155,000 180,000