Topic: Correction of errors

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FA – Nov 2024 – L1 – Q3a – Correction of Errors

Identify and correct accounting errors using journal entries, suspense account, and revised profit calculations.

Question

The trial balance for Aboadze Ltd for the year ended 31 December 2022 failed to agree, showing a difference of GH¢3,600, which was credited to the suspense account. The draft account reported a net profit of GH¢435,000.

During 2023, the following errors were identified:

GH¢30,000 received from the sale of old machinery was incorrectly recorded in the sales account.
The purchase day book was overstated by GH¢48,000.
A private purchase by the director worth GH¢36,000 was included in the company’s purchases.
Bank charges of GH¢14,400 were recorded in the cash book but not posted to the bank charges account.
A sale of GH¢207,000 to Kofi was correctly entered in the sales day book but posted as GH¢270,000 in the personal account.
Discount received of GH¢13,500 was incorrectly posted to the debit side of the discount allowed account.
Wages of GH¢120,000 paid were not posted from the cash book.

Required:

i) Show the journal entries to correct the errors.

ii) Write up the suspense account to eliminate the errors.

iii) Prepare a statement to show the revised profit.

Answer

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Tags: Accounting Adjustments, Error Correction, Financial Statements, Journal Entries, Suspense account, Trial Balance
Level: Level 1

Topic: Correction of errors
Series: Nov 2024

FA – May 2012 – L1 – SA – Q14 – Correction of Errors

Identifying the type of error when maintenance cost is debited to the wrong account.

Question

The amount of N500,000 for the maintenance of the factory machine was debited to the Plant and Machinery account after crediting the bank account with the same amount. Which error has been committed?

A. Complete reversal of entries
B. Error of commission
C. Error of original entry
D. Error of omission
E. Error of principle

Answer

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Tags: Error Correction, Maintenance Cost, Principle
Level: Level 1

Topic: Correction of errors
Series: MAY 2012

FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

Question

Your subordinate in POP-Two Ventures, an inexperienced bookkeeper, has informed you that the trial balance failed to agree by a difference of N170,000, recorded on the credit side of a suspense account. After investigating, you discovered the following errors:

Errors	Amount (N’000)
Cash payment debited to the bank cash book	360
Overcasting of sales	700
Overcasting of purchases	700
Returns inwards omitted from the books	380
Bank charges posted into the cash book without a corresponding entry elsewhere	370
Opening receivables balance brought down incorrectly	180
PPE sold, credited to sales account instead of the correct account	5,000

Required:

i. Effect the necessary corrections by means of journal entries (11 Marks)
ii. Prepare the suspense account (4 Marks)

(Total 15 Marks)

Answer

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Tags: Financial Corrections, Journal Entries, Suspense Accounts, Trial Balance Errors
Level: Level 1

Topic: Correction of errors
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q16 – Correction of Errors

Identifies the correct journal entry to fix a sales/purchase misposting.

Question

Jone Bosco has credit facility with a local trade supplier. A purchase invoice was credited to the supplier’s account and debited to the sales account.

Which of the following journal entries will correct the error?

Account to be Debited	Account to be Credited
A. Sales	Supplier
B. Sales	Purchases
C. Sales	Payables
D. Purchases	Sales
E. Supplier	Sales

Answer

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Tags: Error Correction, Journal Entries
Level: Level 1

Topic: Correction of errors
Series: NOV 2020

FA – Nov 2012 – L1 – SB – Q6 – Correction of errors

Prepare the Royalty Account, Donald’s Account, and the Short Working Recoverable Account.

Question

Maxwell acquired the rights to run a quarry from a parcel of land owned by Donald. The agreement provided for:
i. Payment of royalty of N40 per tonne of granite quarried;
ii. A minimum payment of N2,000,000 per annum; and
iii. The right to recoup (for short workings) is to be extinguished at the end of the third year.

During the first four years of the contract, the following quantities of granite were produced:

Year	Tonnes Produced
2008	40,000
2009	48,000
2010	54,000
2011	56,000

Maxwell’s accounting year ends on 31 December, and payment to Donald is made on 1 January following the year-end.

Required:
a. Prepare the Royalty Account (3 Marks)
b. Prepare Donald’s Account (7 Marks)
c. Prepare the Short Working Recoverable Account (5 Marks)

Answer

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Tags: Financial Statements, Quarry Operations, Royalties, Short Working
Level: Level 1

Topic: Correction of errors
Series: NOV 2012

FA – Nov 2012 – L1 – SB – Q35 – Correction of Errors

Determine the effect of inventory understatement on profits for two years.

Question

In preparing a company’s financial statements for the year ended 30 September 2012, it was discovered that the company’s closing inventory was understated by N450,000. If the error remains uncorrected, the effect of this on the profits for 2012 and 2013 will be?

Answer

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Tags: Error Correction, Inventory, Profit
Level: Level 1

Topic: Correction of errors
Series: NOV 2012

FA – May 2013 – L1 – SA – Q13 – Correction of Errors

This question deals with correcting an accounting error related to partner’s drawings.

Question

The repairs of the personal vehicle of a partner’s wife were wrongly treated as part of motor vehicle expenses of the partnership. Which of the following accounting entries is required to correct the error?

Debit | Credit
A. Partner’s Drawings Account | Motor vehicle expenses account
B. Motor vehicle expenses account | Partner’s current account
C. Motor vehicle expenses account | Partner’s drawings account
D. Motor vehicle expenses account | Partner’s current account
E. Partner’s capital account | Motor vehicle expenses account

Answer

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Tags: Accounting Errors, Partner’s Drawings
Level: Level 1

Topic: Correction of errors
Series: MAY 2013

FA – May 2014 – L1 – SA – Q2 – Correction of Errors

Suspense account entries and explanation of the effects of errors on accounts and profit.

Question

The bookkeeper of Jafola Ltd, having been unable to agree the trial balance as at 31 January 2013, raised a Suspense Account in which he entered the difference. Consequently, he prepared a draft Statement of Financial Position to reflect the amount in the Suspense Account.

On investigation, the following errors were discovered:

i. The addition of the analysis column in the tabular purchase journal posted to goods purchased for resale account was found to be under-cast by N15,000, though the addition of the total column was correct.
ii. Goods bought from a supplier amounting to N5,250 had been posted to the credit of his account as N55,000.
iii. A dishonoured bill of exchange receivable for N200,000 returned by the Company’s bank had been credited to the bank account and debited to bills receivable account.
iv. An item of N10,500 entered in the sales returns book was posted to the debit of the customer who returned the goods.
v. Sundry items of plant sold amounting to N300,000 were posted to the sales day book, the total of which had been posted to the credit of the sales account.
vi. A sum of N60,000 owed by a customer was omitted from the schedule of sundry receivables.
vii. Discounts amounting to N2,250 allowed to a customer were duly entered in his account but not posted to the discounts allowed account.
viii. An amount of N45,000 being tenement rates paid in advance in the previous year was not brought forward as a balance on the tenement rates account.

You are required to:

a. Show the Suspense Account as raised by the bookkeeper with the adjusting entries. (5 Marks)

b. Explain the effect the above errors would have on the profit shown in the accounts (if not rectified) and on the total accounts. Assume the purchase and sales ledgers to be self-balancing. (10 Marks)

Answer

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Tags: Accounting Adjustments, Correction of Errors, Suspense account
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

Question

A company purchased machinery for ₦900,000. The company’s Accountant recorded the transaction in the company’s books by debiting the Purchases Account instead of debiting a Non-Current Asset Account. Raise journal entries to correct the error.

Answer

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Tags: Error Correction, Non-current Assets, Purchases
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – May 2014 – L1 – SA – Q20 – Correction of errors

Determines the missing amount in the partner’s current account.

Question

What is the value of the item in the Current Account marked “X”?
A. ₦8,700
B. ₦13,060
C. ₦15,700
D. ₦16,000
E. ₦17,400

Answer

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Tags: Accounting Entries, Corrections, Current Account, Partnership
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – Nov 2013 – L1 – SA – Q27 – Correction of Errors

Identifying the type of error when motor repairs are recorded in the Motor Vehicle account.

Question

The amount expended on motor repairs recorded in the Motor Vehicle account is an error of ____________.

Answer

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Tags: Accounting for Repairs, Error of Principle, Errors in accounting
Level: Level 1

Topic: Correction of errors
Series: NOV 2013

FA – Nov 2015 – L1 – SA – Q7 – Correction of Errors

This question asks for the correct journal entry to rectify an error in recording staff uniform expenses.

Question

Abiao Company purchased security staff uniform for N250,000. The Accounts Officer felt that the amount was too high to be charged to expenses and consequently debited the amount to the office equipment account.
The journal entry to correct this error is:
A. Dr. Staff uniform account Cr. Office equipment account
B. Dr. Staff uniform account Cr. Suspense account
C. Dr. Office equipment account Cr. Suspense account
D. Dr. Office equipment account Cr. Staff uniform account
E. Dr. Purchases account Cr. Office equipment account

Answer

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Tags: Accounting principles, Error Correction, Journal Entries
Level: Level 1

Topic: Correction of errors
Series: NOV 2015

FA – May 2018 – L1 – SB – Q6b – Correction of Errors

Prepares journal entries and a suspense account to correct errors in Emeka's trial balance.

Question

The trial balance of Emeka failed to agree. The debit exceeded the credit by N8,204,000. The following errors were subsequently discovered:

Sale of goods for N16,000,000 on credit to Lade was debited to Wale’s account.
A sale of goods to Ben for N1,323,000 was posted to the credit of his account.
Purchase of office furniture for N7,600,000 was debited to the purchases account.
The sales day book was under-cast by N10,000,000.
N1,500,000 paid by Titi was not credited to her account, although it was correctly entered in the cash book.
A debit balance of N650,000 in the insurance account was omitted from the trial balance.

Required:
i. Prepare the necessary journal entries (10 Marks)
ii. Prepare the suspense account (7 Marks)

Answer

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Tags: Financial Statements, Journal Entries, Suspense account
Level: Level 1

Topic: Correction of errors
Series: MAY 2018

FA – May 2018 – L1 – SA – Q16 – Correction of Errors

Calculates profit or loss for the period based on opening and closing capital and withdrawals.

Question

If opening capital was N125,000, closing capital was N137,000, and the owner’s withdrawals were N123,000, the amount of profit or loss for the period was:
A. Loss of N139,000
B. Loss of N135,000
C. Profit of N111,000
D. Profit of N135,000
E. Profit of N139,000

Answer

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Tags: Closing Capital, Opening Capital, Profit Calculation
Level: Level 1

Topic: Correction of errors
Series: MAY 2018

FA – May 2018 – L1 – SA – Q6 – Correction of Errors

Calculates the corrected profit after adjusting errors in revenue and expense entries.

Question

At the end of a financial period, the statement of profit or loss of a company showed a profit of N2,400,000. It was however, discovered that revenue of N240,000 was recorded as expenses while expenses of N80,000 had been recorded as revenue. What should be the correct profit for the period?
A. N2,080,000
B. N2,560,000
C. N2,640,000
D. N2,680,000
E. N2,720,000

Answer

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Tags: Error Adjustment, Financial Statements, Profit Calculation
Level: Level 1

Topic: Correction of errors
Series: MAY 2018

FA – Nov 2021 – L1 – SA – Q3 – Correction of errors

This question asks about correcting errors in ledger accounts.

Question

A cheque of N5,000,000 paid to Alhaji Daleko was correctly entered in the cash book but omitted in Alhaji Daleko’s account. To correct this error, debit Alhaji Daleko’s account and credit:
A. Cash account
B. Bank account
C. Suspense account
D. Purchases account
E. Control account

Answer

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Tags: Error Correction, Ledger Balances, Multiple Choice
Level: Level 1

Topic: Correction of errors
Series: NOV 2021

FA – May 2022 – L1 – SB – Q5 – Correction of Errors

Prepare a trial balance, journal entries to correct errors, and a suspense account for Jaja's sole trader business.

Question

Jaja is a sole trader. The trial balance extracted from the balances below, as at March 31, 2021, failed to agree:

Account Description	₦’000
Sales	71,130
Sales Returns	2,100
Purchases	22,150
Expenses	10,710
Non-Current Assets	22,750
Discounts Allowed	740
VAT Liability	6,320
Payables	14,840
Receivables	52,850
Bank Overdraft	3,140
Capital as at April 1, 2020	12,500

A detailed examination of the books revealed the following errors:
(i) The total in the purchases day book was ₦42,150,000, but only ₦22,150,000 was posted to the purchases account.
(ii) An invoice from a supplier for goods worth ₦8,500,000 was omitted from the books.
(iii) Interest earned during the year of ₦105,140,000 was not accounted for in the bank reconciliation.
(iv) Sales returns of ₦1,560,000 was correctly treated in the customer’s account but was credited as ₦560,000 in the sales returns account.
(v) Receivables were overcast by ₦29,830,000.
(vi) Cash drawings by Jaja of ₦2,170,000 were mistakenly credited as cash sales.

Required:
a. Prepare the trial balance of Jaja as at March 31, 2021, and derive the balance in the suspense account as at that date. (6 Marks)
b. Prepare the journal entries, with appropriate narrations, necessary to correct the above errors. (10 Marks)
c. Prepare the suspense account. (4 Marks)

Answer

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Tags: Error Correction, Journal Entries, Suspense account, Trial Balance
Level: Level 1

Topic: Correction of errors
Series: MAY 2022

FA – May 2022 – L1 – SA – Q14 – Correction of Errors

Identify which scenario can be regarded as an error in bookkeeping.

Question

Which of the following can be regarded as an error in bookkeeping?

A. Intentional correct posting in the ledger
B. Intentional failure to record transactions completely
C. A deliberate manipulation of records
D. Incorrect records and oversights that are not intended
E. Double entry posting in the ledger

Answer

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Tags: Accounting, Bookkeeping, Errors
Level: Level 1

Topic: Correction of errors
Series: MAY 2022

FA – Nov 2022 – L1 – SA – Q3 – Correction of Errors

Correct an error in recording a transaction in the books.

Question

A cheque of N5,000,000 paid to Alhaji Dalami had been correctly entered in the cash book but was omitted in Alhaji Dalami’s account. To correct this error, debit Alhaji Dalami’s account and credit
A. Cash account
B. Bank account
C. Suspense account
D. Purchases account
E. Control account

Answer

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Tags: Bank Accounts, Cash Book, Error Correction

Topic: Correction of errors
Series: NOV 2022

FA – Nov 2014 – L1 – SB – Q4b – Bank Reconciliation, Correction of Errors

Preparing cash book adjustments and reconciling the bank balance with the cash book.

Question

On 30 June 2014, Maxwell’s cash book showed that he had an overdraft of N300,000 on his current account at the bank. The bank statement as at the end of June 2014 showed that Maxwell was in credit by N65,000.

On checking the cashbook with the bank statement, the following discrepancies were found:

i. Cheque drawn amounting to N500,000 had been entered in the cash book, but had not been presented.
ii. Cheque received amounting to N400,000 had been entered in the cash book, but had not been credited by the bank.
iii. On instructions from Maxwell, the bank had transferred interest of N60,000 from his savings account to his current account, recording the transfer on 5 July 2014. This amount had been posted into the cash book as at 30 June 2014.
iv. Bank charges of N35,000, shown in the bank statement, had not been entered in the cash book.
v. The payment side of the cash book had been under-cast by N10,000.
vi. Dividend received amounting to N200,000 had been paid directly to the bank and not entered in the cash book.
vii. A withdrawal of N50,000 from the savings account had been shown in the cash book as a drawing from the current account.
viii. A cheque for N25,000 issued to Jones over six months ago had been stale and was later replaced. It was entered again in the cash book, and no other entry was made. Both cheques were included in the total of unpresented cheques shown above.

Required:

i. Indicate the appropriate adjustments in the cash book. (8 Marks)
ii. Prepare a statement reconciling the amended balance with that shown in the bank statement. (6 Marks)
(Total 20 Marks)

Answer

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Tags: Bank Reconciliation, Cash Book, Errors, Financial Statements
Level: Level 1

Topic: Bank reconciliations, Correction of errors
Series: NOV 2014

Topic: Correction of errors

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FA – Nov 2024 – L1 – Q3a – Correction of Errors

Identify and correct accounting errors using journal entries, suspense account, and revised profit calculations.

Required:

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FA – May 2012 – L1 – SA – Q14 – Correction of Errors

Identifying the type of error when maintenance cost is debited to the wrong account.

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FA – Nov 2020 – L1 – SB – Q3b – Correction of Errors

Provide journal entries to correct errors and prepare a suspense account.

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FA – Nov 2020 – L1 – SA – Q16 – Correction of Errors

Identifies the correct journal entry to fix a sales/purchase misposting.

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FA – Nov 2012 – L1 – SB – Q6 – Correction of errors

Prepare the Royalty Account, Donald’s Account, and the Short Working Recoverable Account.

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FA – Nov 2012 – L1 – SB – Q35 – Correction of Errors

Determine the effect of inventory understatement on profits for two years.

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FA – May 2013 – L1 – SA – Q13 – Correction of Errors

This question deals with correcting an accounting error related to partner’s drawings.

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FA – May 2014 – L1 – SA – Q2 – Correction of Errors

Suspense account entries and explanation of the effects of errors on accounts and profit.

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FA – May 2014 – L1 – SA – Q6 – Correcting Errors

Corrects an error in recording machinery purchase.

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FA – May 2014 – L1 – SA – Q20 – Correction of errors

Determines the missing amount in the partner’s current account.

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FA – Nov 2013 – L1 – SA – Q27 – Correction of Errors

Identifying the type of error when motor repairs are recorded in the Motor Vehicle account.

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FA – Nov 2015 – L1 – SA – Q7 – Correction of Errors

This question asks for the correct journal entry to rectify an error in recording staff uniform expenses.

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FA – May 2018 – L1 – SB – Q6b – Correction of Errors

Prepares journal entries and a suspense account to correct errors in Emeka's trial balance.

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FA – May 2018 – L1 – SA – Q16 – Correction of Errors

Calculates profit or loss for the period based on opening and closing capital and withdrawals.

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FA – May 2018 – L1 – SA – Q6 – Correction of Errors

Calculates the corrected profit after adjusting errors in revenue and expense entries.

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FA – Nov 2021 – L1 – SA – Q3 – Correction of errors

This question asks about correcting errors in ledger accounts.

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FA – May 2022 – L1 – SB – Q5 – Correction of Errors

Prepare a trial balance, journal entries to correct errors, and a suspense account for Jaja's sole trader business.

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FA – May 2022 – L1 – SA – Q14 – Correction of Errors

Identify which scenario can be regarded as an error in bookkeeping.

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FA – Nov 2022 – L1 – SA – Q3 – Correction of Errors

Correct an error in recording a transaction in the books.

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FA – Nov 2014 – L1 – SB – Q4b – Bank Reconciliation, Correction of Errors

Preparing cash book adjustments and reconciling the bank balance with the cash book.

You're reporting an error for "FA – Nov 2014 – L1 – SB – Q4b – Bank Reconciliation, Correction of Errors"

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