John Okello extracted a trial balance from his books on 31 December 2019. The trial balance did not balance, and the difference was entered in a suspense account. Subsequently, the following errors were discovered: a. Goods purchased from A. Wamiti for Sh 2,400 have been credited to the account of W. Wamiti, another supplier. b. The purchases account has been overcast by Sh 200. c. Office furniture sold for Sh 4,800 has been credited to the sales account d. Sales of goods to Mary Lebo for Sh 5,400 has been posted to the credit of her account e. Carriage outwards for Sh 1,200 has been credited in error to return outwards account. Match each of the errors with the means of correcting it, either using suspense account or not using suspense account Sales of goods to Mary Lebo for Sh 5,400 has been posted to the credit of her account Carriage outwards for Sh 1,200 has been credited in error to return outwards account Goods purchased from A. Wamiti for Sh 2,400 have been credited to the account of W. Wamiti, another supplier. Office furniture sold for Sh 4,800 has been credited to the sales account The purchases account has been overcast by choose: Do not use the suspense account; Use the suspense account; Either use a suspense account or not; There is no error

The following summarized trial balance appeared in the books of MakossaEnterprises.Purchases and SalesDR _120,000CR200,000Debtors and creditors 80,000 50,000Cash 40,000Other assets and other Liabilities 240,000 200,000Suspense Account 30,000Total 480,000 480,000Subsequent investigations revealed the following errors:i) A sales invoice of Sh.20,000 had not been recognized in the books of accountsii) A cash receipt from a debtor of Sh.15,000 had not been adjusted in the debtors accountiii) A cash payment to a creditor of Sh.9,500 had been debited to the creditor’s account asSh.4,900iv) A purchase of a computer of Sh.50,000 for use in office work had been debited tothe purchases accountP.O. Box 90830100 Eldoret – KenyaTelephone: 0728458276Fax: 254-20-891084Email:[email protected]/ACD/EXM/SEPT - DEC 2022/GABA/BCOM Page 2ISO 9001:2015 Certified by the Kenya Bureau of Standards.v) The accountant had failed to bring forward a balance of Sh.19,600 in the wagespayable account in the post-closing trial balance of the previous financial yearRequired:i) Journal entries to correct the identified accounting errors (5 Marks)ii) The suspense account (5 Marks)iii) The corrected trial balance

You have extracted a trial balance and drawn up accounts for the year ended 31 December 2023. There was a shortage of Sh 78 on the credit side of the trial balance, a suspense account being opened for that amount. During 2023 the following errors made in 2022 were found: (i) Sh 125 received from sales of old office equipment has been entered in the sales account. (ii) Purchases day book had been overcast by Sh 10. (iii) A private purchase of Sh 140 had been included in the business purchases. (iv) Bank charges Sh 22 entered in the cash book have not been posted to the bank charges account. (v) A sale of goods to Lamibo Sh 230 was correctly entered in the sales book but entered in the personal account as Sh 320. (a) Identify the type of errors (Write one from: one of the six/not one of the six) and where it is one of the six, give the specific name (Select one from: "principle", "commission", "omission", "original", "reversal", "compensating", or "not applicable"). Error Type of error Name of error (i) (ii) (iii) (iv) (v) (b) If the net profit originally calculated for 2023 was Sh 28,400, the net profit after corrections will be

The trial balance can help in detecting errors. Identify which of the following errors would be detected at the point of extracting a trial balance. 1-The bookkeeper enters cash received of Sh 50,000 from Peter Jones as a debit in the cashbook but enters the credit of Sh 50,000 in the ledger account of Roger Jones. 2-The bookkeeper enters a cash sale as a credit of Sh 4,000 in the cash book and as a debit of Sh 4,000 in the sales account. 3-The bookkeeper omits a cash sale of Sh 23,000 from the cash book and from the sales accounts. 4-The bookkeeper enters a cash sale as a debit of Sh 49,000 in the cash book and as a credit of Sh 94,000 in the sales account Choose: not possible to tell; will not be detected, trial balance will still agree; will be detected by the trial balance not agreeing; may or may not be detected

QUESTION TWOThe following trial balance has been extracted from the ledger of Herbert Howell, a sole trader,as at 31 May 2019, the end of his most recent financial year.Herbert HowellTrial Balance As At 31 May 2019Dr CrSh. Sh.Property at cost 90,000Equipment at cost 57,500Provision for depreciation (as at 1 June2018)Property 12,500Equipment 32,500Stock as at 1 June 2018 27,400Purchases 259,600Sales 405,000Discounts allowed 3,370Discounts received 4,420Wages and salaries 52,360Bad debts 1,720Loan interest 1,560Carriage out 5,310Other operating expenses 38,800Trade debtors 46,200Trade creditors 33,600Provision for bad debts 280Cash on hand 151Bank overdraft 14,500Drawings 28,93013% loan 12,000Capital, as at 1 June 2018 ______ 98,101612,901 612,901The following additional information as at 31 May 2019 is available:(a) Stock as at the close of business was valued at Sh.25,900.(b) Depreciation for the year ended 31 May 2019 has yet to be provided as follows:Property - 1% using the straight-line methodEquipment - 15% using the straight-line methodCUEA/ACD/EXM/SEPT - DEC 2022/GABA/BCOM Page 4ISO 9001:2015 Certified by the Kenya Bureau of Standards.(c) Wages and salaries are accrued by Sh.140.(d) Other operating expenses include certain expenses prepaid by Sh.500. Other expensesincluded under this heading are accrued by Sh.200.(e) The provision for bad debts is to be adjusted so that it is 0.5% of trade debtors as at 31 May2019.(f) Purchases include goods valued at Sh.1,040, which were withdrawn by Mr Howell for hisown personal use.Required:Prepare Mr. Howell’s trading and profit and loss account for the year ended 31 May 2019 and hisbalance sheet as at 31 May 2019.

A trial balance will not balance if:a.a correct journal entry is posted twice.b.the purchase of supplies on account is debited to Supplies and credited to Cash.c.a $100 cash drawing by the owner is debited to Owner’s Drawings for $1,000 and credited to Cash for $100.d.a $450 payment on account is debited to Accounts Payable for $45 and credited to Cash for $45