(i) Ryan Hinds

Revised Trial Balance

DR CR
$ $
Capital 53,780
Purchases 9,000
Sales 18,400
Returns Inwards 100
Returns Outwards 250
Depreciations for the yea 890
Wages 4,300
Discount allowed 450 Discount allowed is an expense so it must carry a deb
Discount received 270 Discount received is income so it must carry a credit b
Debtors 1,250
Creditors 2,750
Premises 45,000
Fixtures & Fittings 8,900
Bank overdraft 1,200 Bank overdraft is a current liability and must be place
Cash 150
Carriage Inwards 370
Opening stock 2,500
Carriage outwards 140 Carriage outwards is an expense so it must carry a de
Sundry Expenses 1,420
Provision for bad debt 420 Provisions carry credit balances as it is going to reduc
74,470 77,070
Suspense account 2,600 The debit column is short so the suspense balance has
77,070 77,070

(ii) DR CR
$ $
(a) Purchases 3,000
Suspense 3,000
To correct the purchases figure
which was short

(b) Suspense 600

Sales 600
The sales figure was short. Now
corrected

(c) Sales 300

 Disposal of asset 300
To correctly record cash received
from the sales of old furniture

(d) Returns inwards behaves like purchases, in that

it represents goods coming into the business, so
that account is debited.
Returns outwards behaves like sales, in that it
represents goods leaving the business, so
the account is credited.

The error was that returns outwards was debited.

So to correct the error you have to credit the account.

Suspense 100
Returns Outwards 100

To make the correct entry, you do the following:

Returns inwards 100

Suspense 100

(iii) Writing up the Suspense Account:

DR SUSPENSE ACCOUNT CR
$ $
Balance b/d 2,600 Purchases 3,000
Sales 600 Returns Inwards 100
Returns Outwards 100 Balance c/d 200

3,300 3,300

Bal b/d 200

The fact that the suspense account still has a balance, means that all the errors were not found.
 expense so it must carry a debit balance and be in the debit column
come so it must carry a credit balance and be placed in the credit column

rent liability and must be placed in credit column

n expense so it must carry a debit balance and be placed in the debit column

balances as it is going to reduce a debit figure namely the debtors in this instance.

ort so the suspense balance has to be placed on the short side.