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

PART E: PREPARING A TRIAL BALANCE 

 

284

 

(b) SUSPENSE 

A/C 

 

 

$       

 

$     

(i) Sales 

 

1,000 

 

End of year balance 

 

1,040

(v) Purchases 

 

   500 

 

(vi)  Purchase returns/sales returns 

 

   460

 

 

1,500   

 

1,500

(c)  

 

 

$       

Gross profit originally reported 

 

35,750 

Sales omitted 

 

1,000 

Plant costs wrongly allocated  

 

240 

Incorrect recording of purchases 

 

   500 

Cash discount incorrectly taken 

 

(150)

 

Sales credit note wrongly allocated

 

 

    (460)

 

Adjusted gross profit 

 

36,880 

 

 

Profit for the year originally reported 

 

18,500 

Adjustments to gross profit $(36,880 – 35,750) 

 

1,130 

Closing inventory 

 

     240 

Adjusted profit for the year 

  

19,870 

Note. It has been assumed that the delivery and installation costs on plant have been included in purchases.  

 

 

2.13 Effect of corrections of errors on profit for the year and total assets 

In the exam, questions on errors often ask you to give the effect of the correction of the error on profit for 

the year or the statement of financial position total. Work through the following questions to make sure 

you understand how to do this.