Question

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15. In the process of assisting the bookkeeper of SWIFT SERVICES to rectify the trial balance...

15. In the process of assisting the bookkeeper of SWIFT SERVICES to rectify the trial balance at 28 February 20.1, the following errors, which resulted in the disequilibrium of the totals of the trial balance, were traced. Control accounts are in use.

(a) The total of the February 20.1 cash payments journal amounting to R29 800, has not been transferred to the bank account in the general ledger. The entity operated on a bank overdraft.

(b) A payment of R300 to a creditor was entered in the cash payments journal and posted to the creditor’s personal account, but it has not been analysed in the trade payables column of the cash payments journal.

(c) Rent amounting to R600, paid for February 20.1, was correctly entered in the cash payments journal, but posted to the credit side of the rent account in the general ledger.

Which one of the following amounts represents the difference in the totals of the trial balance, before the above mistakes were rectified?

(1) R28 000

(2) R28 300

(3) R29 500

(4) R29 800

(5) None of the above

Solutions

Expert Solution

(Amount in R)
Errors Details Debit Credit
a) Bank Overdraft is understated by 29800 on credit side -29800
b Trade Payable is Overstated by 300 on credit side 300
c) Rent is overstated by 600 credit and understated by 600 debit -600 600
Total Effect -600 -28900

Debit side is undertated by -R600. Credit side is understated by R28900. So difference in total of Trial balance is of R28300 (-28900 -(-600))

Correct Answer is 2) R28300

ekkarill92 answered 2 years ago
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