IGCSE ACCOUNTING 907 – SECTION TESTS

Name: Date: Passing Score: Score:

24
30 80% 30 %

Section 1 Test

1. The following balances were extracted from the books of Natalie as at 30 June 2017.

Trial Balance as at 30 June 2017

Debit Credit
$ $
Purchases 48,800
Sales 79,500
Trade Receivables 7,500
Trade Payables 7,130
Bank 24,030
Motor Vehicles 33,000
Office Equipment 8,000
Drawings 2,480
General expenses 2,200
Inventory on 1 July 2016 7,400
Sales Returns 900
Purchase returns 280
Capital 47,400
134,310 134,310
A detailed examination of Natalie’s books revealed the following errors.

i. Purchase of new office equipment worth $600 was wrongly recorded in the
Purchases account.
ii. Drawings of goods costing $320 for owner’s personal use had only been
recorded in the Purchases account.
iii. A credit sale of $340 to Jason was omitted from the books.
iv. Goods worth $200 returned to Miramar were posted to Mormaer’s account
v. The Purchase Returns account had been undercast by $320

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Required:

a. Identify the errors above that do not affect the Trial Balance. Name the type of
error in each case. [3 marks]

b. Prepare the journal entries to correct all the above errors. Narrations are not
required. [10 marks]

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2. Chandler prepared his trial balance on 31 August 2018, which failed to agree, and he
posted the difference of $180 to the debit side, a suspense account.
Chandler then found the following errors:

i. Purchase account had been overcast by $20.

ii. A payment of $370 to a supplier, Davies, was posted to the account of David
in error.
iii. Chandler had taken drawings of $800. This was entered correctly in the bank
account but had not been posted in the drawings account.
iv. A receipt of $300 from Brando, a customer, had been correctly entered in the
bank but had been posted in the wrong side of his account.
v. Rent paid, $500 by cheque was completely omitted from the books.

Required:

a. Correct all the above errors in a general journal. [10 marks]

b. Prepare a suspense account to show all the corrected errors. [7 marks]

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Name: Date: Passing Score: Score:

24
30 80% 30 %

Section 2 Test

1. Jamie prepared a draft income statement for the year ended 31 December 2018 that
showed a profit figure of $5,000, and then found all the following errors:

i. Closing inventory had been understated by $1,100.

ii. Discount received of $300 had been entered in the debit side of the discount
received account.
iii. The debit balance of $547 from the insurance account had been brought down
as $457.
iv. A purchase invoice of $2,400 had been completely omitted from the books.
v. Rent received account had been overcast by $400.
vi. An invoice of $100 for cleaning expenses had been wrongly posted to the
wages account.

Required:

a. Prepare the statement of corrected profit for the year of Jim for the year ended
31 December 2018. Show whether each correction increases, decreases or has
no effect on the profit figure. [13 marks]

b. What may have been the reason for Jamie to prepare a draft income
statement? [2 marks]

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2. The statement of financial position below contains errors. This statement was
prepared as at 31 December 2017.

Statement of Financial Position as at 31 March 2018

$ $
Fixed Assets Capital
Premises 30,000 Opening Balance 46,900
Motor Vehicles 10,000 Net Profit 6,000
Inventory 4,000
Current Liabilities
Current Assets Trade Payables 4,000
Trade Receivables 1,900 Drawings (5,000)
Bank 2,000
Fixtures & Fittings 4,000

51,900 51,900

After the SOFP was prepared, the owner was informed of the following errors:

i. Purchase of Fixtures & Fittings, $1,000 paid by cheque was not entered in the
books.
ii. Cost of machinery repairs, $2,000 was posted in error to the machinery account.
iii. A credit purchase of $2,000 was entered into the purchase account but not into
the credit supplier’s account.
iv. The correct amount for closing inventory is $6,000.

Required:

a. Prepare the corrected profit for the year figure to be used in the corrected SOFP
as at 31 December 2017. [3 marks]

b. Prepare the corrected SOFP as at 31 December 2017. [12 marks]

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