I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

515 

59 D 

 $      

List price 

  

200,000 

Trade discount 

 

 (20,000) 

 

Settlement discount 5%* 

 

*deducted as customer is expected to take up the settlement discount 

   

180,000 

   (9,000) 

  

171,000 

 

60 

B 

–3,860 – 9,160 + 16,690 = 3,670. Remember that the opening bank balance is 

overdrawn. 

61 

B 

Items 2 to 4 are adjustments to the bank balance per the statement. 

62 

B 

Outstanding lodgements and unpresented cheques are timing differences. 

63 

C 

The ledger balance of $540 credit should be adjusted by a credit entry of $28 for bank 

charges. Therefore the corrected ledger balance is $568 credit. The bank statement 

balance is then $(568) + $620 cheques not yet on bank statement, ie $52 cash at bank.  

64 

B  

This is an error of commission, where a credit entry has been incorrectly recorded as a 

debit entry. 

65 A   

SUSPENSE 

ACCOUNT 

 

$   

 

$   

Balance b/d 

210 

Gas bill

2 

(420 – 240) 

180 

Interest

1

 

   70 

Sales invoice

3 

(2  50) 

 100 

 

 280 

 

 280 

 

 

1

 error of omission 

 

 

2  

transposition error 

 

 

3 

 error of commission 

66 

B 

To correct the bank interest paid and bank interest received accounts, a debit of $88 is 

required for each account. The corresponding credit of $176 goes to the suspense 

account. 

67 

(a) 

The effects are as follows. 

(1) 

Motor expenses accrual: $520 additional expense, so reduction in profit. 

(2) 

Rent prepayment: $450 reduction in expense, so increase in profit. 

(3) 

Depreciation: total charge $13,146 additional expense, so reduction in profit. 

 

Total effect on net profit 

= –520 + 450 – 13,146 

= 13,216 reduction  

Working: Depreciation charge  

Motor vehicles: $45,730 × 20% = $9,146 

Fixtures and fittings: 10% × $(42,200 – 2,200) = $4,000 

Total: $4,000 + $9,146 = $13,146 

 

(b) 

B 

The inventory account is only changed at the end of the accounting period. 

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