Question

Question 1 All-In-One Trading started operating on the 01 January 2017. Throughout the year the following transaction were recorded in their books as at 31 December 2017. 1. Interest received of N$ 2 500 was credited to Interest expense; 2. Credit sales of N$ 3 000 was not recorded; 3. Bank Charges of N$ 500 was debited to Bank account; 4. Motor Vehicle that was purchased for N$ 12 000 was debited to purchases account and credited to bank account; 5. Loan Received of N$ 1 500 was debited to bank account and credited to creditors account; 6. Payment for wages, N$ 700 was debited to cash and credited wages expense account; 7. Credit sales to Mr. SuperAweh of N$ 2 000, was credited to Mr. SuperAweh account and debited to sales account, since it was a credit sale; 8. Cheque received from a debtor of N$ 1 850 was recorded as N$ 1 580; 9. Cheque payment of N$ 1 000 to Mrs Hosh-Hosh was marked as refer to drawer; 10. Cash drawings of N$ 650 had been credit to the bank account and debited to drawings account; 11. A supplier with a credit balance of N$ 5 250, gave us 10% settlement discount if the account is settled before Independence Day. The account was settled in full before the independence day; 12. Depreciation expense on the motor vehicle of N$ 1 300 was debited to depreciation expense and credited to motor vehicle cost. REQUIRED: Prepare journal entries to correct above mentioned errors.

Answer 1

	Recification entries
1	Interest expense	2500
	Interest Revenue		2500
	(wrong credit to interest expense rectified)
2	Accounts Receivable	3000
	Sales revenue		3000
	(Recording of credit sales)
3	Miscellaneous expense	500
	Bank		500
	(Bank charges debited to the appropriate account)
4	Motor Vehicle	12000
	Purchases		12000
	(Wrong debit to purchases rectified with a debit to asset a/c)
5	Creditors/Accounts payable a/c	1500
	Loan From Bank		1500
	(Wrong credit recified)
6	Wages expense(700+700)	1400
	Cash(700+700)		1400
	(Wrong credit & debit rectified by recording twice the same amount--one for rectification & one for actual recording.)
	(Can pass the same journal entry twice also)
7	SuperAweh A/c.receivable	4000
	Sales revenue		4000
	(Same as in 6 above)
8	Cash	270
	Accounts receivable		270
	(1850-1580)
	(Short-debit rectified)
9	Cash	1000
	Accounts payable-Mrs. Hosh		1000
	(restoration of the payable on NSF )
	Correct Entry
10	Drawings	650
	Bank/Cash		650
	(Drawings from bank recorded)
11	Accounts payable	250
	Cash		225
	Purchase discounts		25
	(Settlement of supplier account before due date at a 10% dsicount)
12	Motor Vehicles	1300
	Accumulated Depreciation-Motor Vehicles		1300
	(Wrong credit to the asset a/c rectified)