Principles of Accounts for CSEC®

2nd edition

Answers to Chapter 7: Control systems

7.1 The trial balance and the correction of errors
Question 1

Error Type of error

a. An invoice received from a supplier for $657 was recorded in the Error of original
purchases book as being for $567. entry
b. A returns inwards for $89 from an account receivable, S McNee, was Error of commission
credited to the account of S McKoy.
c. Cash sales of $820 were recorded in the accounts as Dr Cash $820 Cr Sales Compensating error
$800; the total of the travel expenses analysis column in the petty cash
book was mis-totalled at $30 rather than the correct figure of $50.
d. A cheque counterfoil for rent $680 was entirely overlooked. Error of omission
e. The purchase of some new office equipment $2 300 was debited to the Error of principle
purchases account.
f. The entries made for the payment of an account payable, L Mohammed, Error of complete
by cheque $320 were: Dr Bank $320, Cr L Mohammed $320. reversal

Question 2 (identifying errors not revealed by a trial balance)

Error Type of error
a. A till roll showed that cash sales had totalled $2 320. The entries in the Error of original entry
accounts were Dr Cash $2 230 and Cr Sales $2 230.
b. A petty cash voucher for stationery, $18, was mislaid. Error of omission
c. Discounts allowed of $28 were debited to the receivable account and Error of complete
credited to the discounts allowed account. reversal
d. The payment of interest $110 was debited to the insurance account. Error of commission
e. The payment of vehicle running costs, $80, had been debited to the Error of principle
motor vehicles account.
f. The returns inwards book was mis-totalled at $170 instead of $160. Compensating error
Rent received from a tenant of $380 had been entered in the rent
received account as $390.

Question 3
JOURNAL
$ $
a. Purchases 90
Account payable 90
Correction of error of original entry

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Answers to Chapter 7: Control systems

JOURNAL
$ $
b. Account receivable: S McKoy 89
Account receivable: S McNee 89
Correction of error of commission

c. Travel expenses 20
Sales 20
Correction of compensating error

d. Rent 680
Bank 680
Correction of error of omission

e. Office equipment 2,300

Purchases 2,300
Correction of error of principle

f. Account payable: L Mohammed 640

Bank 640
Correction of error of complete reversal

Question 4
JOURNAL
$ $
a. Cash 90
Sales 90
Correction of error of original entry
b. Stationery 18
Petty cash 18
Correction of error of omission
c. Discounts allowed 56
Accounts receivable 56
Correction of error of complete reversal
d. Interest 110
Insurance 110
Correction of error of commission
e. Vehicle running costs 80
Motor vehicles 80
Correction of error of principle
f. Rent received 10
Returns inwards 10
Correction of compensating error

2 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
Answers to Chapter 7: Control systems

Question 5
a.
JOURNAL
$ $
1 Suspense 400
Sales 400
Correction of misposted sales
2 Purchases 700
Suspense 700
Correction of failure to post total purchases
3 Suspense 1 700
Rent received 1 700
Correction of failure to post rent received

b.
Dr Suspense account Cr
$ $
Sales 400 Balance 1 400
Rent received 1 700 Purchases 700
2 100 2 100

Question 6
a.
JOURNAL
$ $
1 Suspense 720
Discounts received 720
Correction of failure to post total discounts received
2 Returns inwards 90
Suspense 90
Correction of undercast returns inwards
3 Suspense 230
Wages 230
Correction of misposted wages

b.
Dr Suspense account Cr
$ $
Discounts received 720 Balance 860
Wages 230 Returns inwards 90
950 950

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Answers to Chapter 7: Control systems

Question 7
a.
JOURNAL
$ $
1 Account receivable 270
Suspense 270
Correction of misposted receipt
2 Postage 70
Suspense 70
Correction of failure to post petty cash total
3 Suspense 380
Returns outwards 380
Correction of undercast returns

b.
Dr Suspense account Cr
$ $
Returns outwards 380 Balance (difference) 40
Account receivable 270
Postage 70
380 380

Question 8
a.
JOURNAL
$ $
1 Sales 410
Suspense 410
Correction of overcast sales book
2 Rent 730
Suspense 730
Correction of failure to post rent payment
3 Discounts allowed 10
Suspense 10
Correction of misposted discounts

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Answers to Chapter 7: Control systems

b.
Dr Suspense account Cr
$ $
Balance (difference) 1,150 Sales 410
Rent 730
Discounts allowed 10
1,150 1,150

Question 9
a. E
 rrors not affecting agreement of trial balance totals: 1, 4, 6
Errors affecting agreement of trial balance totals: 2, 3, 5
b.
JOURNAL
$ $
1 Joseph Wright 370
Joshua Wright 370
Correction of error of commission
2 Suspense 830
T Mungroo 830
Correction of failure to post receipt from account
receivable
3 General expenses 40
Suspense 40
Correction of failure to post petty cash expenditure
4 Bank 90
JK Samaroo 90
Correction of error of original entry
5 Suspense 680
Returns outwards 680
Correction of failure to post returns outwards total
6 Insurance 700
Bank 700
Correction of error of complete reversal

c.
Dr Suspense account Cr
$ $
T Mungroo 830 Balance (difference) 1,470
Returns outwards 680 General expenses 40
1,510 1,510

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Answers to Chapter 7: Control systems

Question 10
a. Errors revealed by the trial balance: 1, 2, 4, 5
Errors not revealed by the trial balance: 3, 6
b.
JOURNAL
$ $
1 Discounts received 300
Suspense 300
Correction of overcast discounts received column
2 Receivable: Steven Taylor 830
Suspense 830
Correction of entry not posted from sales book
3 Stationery 40
Cash 40
Correction of error of omission
4 Suspense 270
Returns inwards 270
Correction of misposted total from returns inwards book
5 Water charges 340
Suspense 340
Correction of entry not posted from cash book
6 Cash 1 380
Sales 1 380
Correction of error of complete reversal

c.
Dr Suspense account Cr
$ $
Difference in TB 1 200 Discounts received 300
Returns inwards 270 Steven Taylor 830
Water charges 340
1 470 1 470

Question 11
Sharon Lee
Correction of draft profit for the year ended 30 November 2018
$
Draft profit 89 500
Correction of omission of depreciation (3 000)
Correction of understated purchases (400)
Correction of mis-balanced loan account no effect
Correction of omission of wages accrual (450)
Correction of wrongly recorded carriage no effect
Correction of incorrectly treated rent (9 400)
Correction of omission of returns inwards (3 280)
Corrected profit 72 970

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Answers to Chapter 7: Control systems

Question 12
Zero Stores
Correction of draft profit for the year ended 30 September 2018
$
Draft profit 132 850
Correction of omission of general expenses (2 140)
Correction of understated depreciation (3 700)
Correction of overstated sales (710)
Correction of misbalanced trade receivable no effect
Correction of wrongly treated discounts no effect
Correction of rent accrual omitted (630)
Correction of overstated returns outwards (300)
Corrected profit 125 370

7.2 Control accounts

Question 13
Dr Accounts receivable control account Cr
$ $
June 1 Opening balance 9 000 June 30 Receipts 31 000
30 Credit sales 37 000 30 Discounts allowed 3 000
30 Returns inwards 5 000
30 Bad debts 1 000
30 Closing balance c/d 6 000
46 000 46 000
July 1 Balance b/d 6 000

Question 14
Dr Accounts receivable control account Cr
$ $
Dec 1 Opening balance 11 400 Dec 31 Receipts 48 300
31 Credit sales 56 100 31 Discounts allowed 2 700
31 Returns inwards 1 900
31 Bad debts 300
31 Closing balance c/d 14 300
67 500 67 500
Jan 1 Balance b/d 14 300

Question 15
a.
Dr Accounts receivable control account Cr
$ $
Jan 1 Opening balance 7 400 Jan 1 Opening balance 230
31 Credit sales 27 480 31 Returns inwards 620
31 Dishonoured cheques 190 31 Receipts 21 930
31 Interest charges 70 31 Discounts allowed 330
31 Closing balance c/d 390 31 Bad debts 80
31 Contras 420
31 Closing balance c/d 11 920
35 530 35 530
Feb 1 Balance b/d 11 920 Feb 1 Balance b/d 390

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Answers to Chapter 7: Control systems

b.
The control account balance and the total of balances in the sales ledger agree, so it appears that
there are no errors in the accounting records.
Question 16
a.
Dr Accounts receivable control account Cr
$ $
Oct 1 Opening balance 11 580 Oct 1 Opening balance 490
31 Credit sales 38 560 31 Returns inwards 2 210
31 Dishonoured cheques 590 31 Receipts 33 400
31 Interest charges 90 31 Discounts allowed 820
31 Refunds 490 31 Bad debts 240
31 Closing balance c/d 540 31 Contras 210
31 Closing balance c/d 14 480
51 850 51 850
Nov 1 Balance b/d 14 480 Nov 1 Balance b/d 540

b.
The control account balance and the total of balances in the sales ledger do not agree (there is a
difference of $790) so there must be error(s) in the sales ledger, in the control accounts or in both.
Question 17
Dr Accounts payable control account Cr
$ $
July 31 Payments 33 200 July 1 Opening balance 17 400
31 Discounts received 2 700 31 Purchases 41 500
31 Returns outwards 3 900
31 Balance c/d 19 100
58 900 58 900
Aug 1 Balance b/d 19 100

Question 18
Dr Accounts payable control account Cr
$ $
Mar 31 Payments 161 310 Mar 1 Opening balance 53 480
31 Discounts received 4 370 31 Purchases 185 920
31 Returns outwards 11 990
31 Balance c/d 61 730
239 400 239 400
Apr 1 Balance b/d 61 730

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Answers to Chapter 7: Control systems

Question 19
a.
Dr Accounts payable control account Cr
$ $
Oct 1 Opening balance 830 Oct 1 Opening balance 31 620
31 Payments 75 060 31 Purchases 82 880
31 Discounts received 2 240 31 Interest charges 250
31 Purchases returns 5 370 31 Balance c/d 990
31 Contras 370
31 Balance c/d 31 870
115 740 115 740
Nov 1 Balance b/d 990 Nov 1 Balance b/d 31 870

b.
The control account balance and the total of balances in the purchases ledger do not agree
(there is a difference of $730), so there must be error(s) in the purchases ledger or in the control
account or in both.
Question 20
a.
Dr Accounts payable control account Cr
$ $
Feb 1 Opening balance 478 Feb 1 Opening balance 11 475
28 Payments 47 478 28 Purchases 53 660
28 Discounts received 2 113 28 Interest charges 138
28 Purchases returns 5 097 28 Refunds 309
28 Contras 590
28 Balance c/d 10 418 28 Balance c/d 592
66 174 66 174
Mar 1 Balance b/d 592 Mar 1 Balance b/d 10 418

b.
The control account balance and the total of balances in the purchases ledger agree, so it
appears that there are no errors in the accounting records.

7.3 The bank reconciliation statement

Question 21
ANYBANK plc
Bank statement for Jody’s Jewellery Store
Date Details Dr Cr Balance
$ $ $
May 1 Balance 1 400 Cr
4 27204 320 1080 Cr
8 DD Interstate Power plc 670 410 Cr
12 27205 820 410 Dr
15 Sundries 1 780 1 370 Cr
20 SO Ford Holdings plc 480 890 Cr
24 Credit transfer – Smartjewels Ltd 950 1 840 Cr
29 CHR 110 1 730 Cr

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 Answers to Chapter 7: Control systems

Question 22

Bank statement for Pitts Fishing Supplies

Date Details Dr Cr Balance
$ $ $
July 1 Balance 930 Cr
4 787891 640 290 Cr
11 787892 310 20 Dr
12 SO Quality Finances plc 450 470 Dr
17 Sundries 1 370 900 Cr
19 Credit transfer – Nana Retail 590 1 490 Cr
23 DD Telecoms plc 220 1 270 Cr
28 CHR 140 1 130 Cr

Question 23
ANYBANK plc
Bank statement for Jody’s Jewellery Store
Date Details Dr Cr Balance
$ $ $
May 1 Balance ✓1 400 Cr
4 27204 ✓320 1 080 Cr
8 DD Interstate Power plc 670 410 Cr
12 27205 ✓820 410 Dr
15 Sundries ✓1 780 1 370 Cr
20 SO Ford Holdings plc ✓480 890 Cr
24 Credit transfer – Smartjewels Ltd 950 1 840 Cr
29 CHR 110 1 730 Cr

BOOKS OF JODY’S JEWELLERY STORE

Dr CASH BOOK (Bank columns only) Cr
$ $
May 1 Balance ✓1 400 May 2 General expenses (chq 27204) ✓320
13 Sales ✓1 780 9 Latoya Fray (chq 27205) ✓820
28 Sales 1 240 23 Supagems (chq 27206) 740
28 Drawings (chq 27207) ✓480
31 Balance c/d 2 060
4 420 4 420
June 1 Balance b/d 2 060

Items not ticked in bank statement:

• DD on 8 May for $670
• Credit transfer on 24 May for $950
• Charges on 29 May for $110
Items not ticked in cash book:
• Cheque 27206 Supagems on 23 May for $740
• Sales on 28 May for $1 240

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 Answers to Chapter 7: Control systems

Question 24
Bank Statement for Pitts Fishing Supplies
Date Details Dr Cr Balance
$ $ $
July 1 Balance ✓930 Cr
4 787891 ✓640 290 Cr
11 787892 ✓310 20 Dr
12 SO Quality Finances plc 450 470 Dr
17 Sundries ✓1 370 900 Cr
19 Credit transfer – Nana Retail 590 1 490 Cr
23 DD Telecoms plc 220 1 270 Cr
28 CHR 140 1 130 Cr

BOOKS OF PITTS FISHING SUPPLIES

Dr CASH BOOK (Bank columns only) Cr
$ $
July 1 Balance ✓930 July 3 TMT Ltd (chq 787891) ✓640
13 Sales ✓1 370 8 Drawings (chq 787892) ✓310
29 Sales 990 20 Stationery (chq 787893) 100
29 Salary (chq 787894) 1 700
31 Balance c/d 540
3 290 3 290
Aug 1 Balance b/d 540

Items not ticked in bank statement:

• SO payment on 12 July for $450
• Credit transfer received on 19 July for $590
• DD payment on 23 July for $220
• Charges paid on 28 July for $140
Items not ticked in cash book:
• Cheque 787893 for $100 on 20 July; cheque 787894 for $1,700 on 29 July
• Sales on 29 July for $990
Question 25
BOOKS OF JODY’S JEWELLERY STORE
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
May 1 Balance ✓1 400 May 2 General expenses (chq 27204) ✓320
13 Sales ✓1 780 9 Latoya Fray (chq 27205) ✓820
28 Sales 1 240 23 Supagems (chq 27206) 740
28 Drawings (chq 27207) ✓480
31 Balance c/d 2 060
4 420 4 420
June 1 Balance b/d 2 060 June 1 Electricity (DD) 670
1 Credit transfer 1 Bank charges 110
Smartjewels Ltd 950 1 Balance c/d 2 230
3 010 3 010
June 1 Balance b/d 2 230

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 Answers to Chapter 7: Control systems

Question 26
BOOKS OF PITTS FISHING SUPPLIES
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
July 1 Balance 930✓ July 3 TMT Ltd (chq 787891) 640✓
13 Sales 1 370✓ 8 Drawings (chq 787892) 310✓
29 Sales 990 20 Stationery (chq 787893) 100
29 Salary (chq 787894) 1 700
31 Balance c/d 540
3 290 3 290
Aug 1 Balance b/d 540 Aug 1 Loan repayment 450
1 Credit transfer 1 Telephone (DD) 220
Nana Retail 590 1 Bank charges 140
1 Balance c/d 320
1 130 1 130
Aug 1 Balance b/d 320

Question 27
Either:
JODY’S JEWELLERY STORE
Bank reconciliation statement at 1 June 2018
$ $
Balance as per bank statement 1 730
Less: unpresented cheque
27206 Supagems 740
990
Add: amount not yet credited 1 240
Balance as per cash book 2 230

Or:
JODY’S JEWELLERY STORE
Bank reconciliation statement at 1 June 2018
$ $
Balance as per cash book 2 230
Add: unpresented cheque
27206 Supagems 740
2 970
Less: amount not yet credited 1 240
Balance as per bank statement 1 730

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 Answers to Chapter 7: Control systems

Question 28
Either:
PITTS FISHING SUPPLIES
Bank reconciliation statement at 1 August 2018
$ $
Balance as per bank statement 1 130
Less: unpresented cheques
787893 Stationery 100
787894 Salary 1 700
1 800
(670)
Add: amount not yet credited 990
Balance as per cash book 320

Or:
PITTS FISHING SUPPLIES
Bank reconciliation statement at 1 August 2018
$ $
Balance as per cash book 320
Add: unpresented cheques
787893 Stationery 100
787894 Salary 1 700
1 800
2 120
Less: amount not yet credited 990
Balance as per bank statement 1 130

Question 29
a., b.
MIDBAY BANK plc
Bank statement for ELIAS WHOLESALE FRUIT
Date Details Dr Cr Balance
$ $ $
Oct 1 Balance ✓4310 Cr
3 447802 JKJ Imports ✓2 730 1 580 Cr
11 Sundry credit ✓1 640 3 220 Cr
13 CHR 240 2 980 Cr
18 447804 ✓630 2 350 Cr
21 DD Regional Telecoms plc 550 1 800 Cr
23 Sundry credit ✓1 890 3 690 Cr
25 Credit transfer: M Deosaran 490 4 180 Cr
26 447805 Gobin Traders ✓1 480 2 700 Cr
27 SO Transcity Properties ✓820 1 880 Cr
28 Dishonoured cheque: YJ Traders 450 1 430 Cr

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 Answers to Chapter 7: Control systems

b., c.
BOOKS OF ELIAS WHOLESALE FRUIT
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
Oct 1 Balance ✓4 310 Oct 1 JKJ Imports (chq 447802) ✓2 730
7 Sales ✓1 640 3 Electricity (chq 447803) 490
20 Sales ✓1 150 12 Admin expenses (chq 447804) ✓630
20 M Lall ✓740 23 Gobin Traders (chq 447805) ✓1 480
28 Sales 1 370 26 L Thomas (chq 447806) 810
27 Rent (standing order) ✓820
31 Balance c/d 2 250
9 210 9 210
Nov 1 Balance b/d 2 250 Nov 1 Bank charges 240
1 Credit transfer 1 Telephone DD 550
M Deosaran 490 1 YJ Traders Ltd (dishonoured chq) 450
1 Balance c/d 1 500
2 740 2 740
Nov 1 Balance b/d 1 500

d.
Either:
ELIAS WHOLESALE FRUIT
Bank reconciliation statement at 1 November 2018
$ $
Balance as per bank statement 1 430
Less: unpresented cheques
447803 Electricity 490
447806 L Thomas 810
1 300
130
Add: amount not yet credited 1 370
Balance as per cash book 1 500

Or:
ELIAS WHOLESALE FRUIT
Bank reconciliation statement at 1 November 2018
$ $
Balance as per cash book 1 500
Add: unpresented cheques
447803 Electricity 490
447806 L Thomas 810
1 300
2 800
Less: amount not yet credited 1 370
Balance as per bank statement 1 430

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 Answers to Chapter 7: Control systems

Question 30
a., b.
WESTOWN BANK plc
Bank statement for ELITE PUBLISHING
Date Details Dr Cr Balance
$ $ $
May 1 Balance ✓7 328 Cr
5 Sundry credit ✓3 395 10 723 Cr
6 110744 MLD Books ✓2 242 8 481 Cr
8 110747 Abbey Stationery Ltd ✓1 631 6 850 Cr
14 Credit transfer: investment interest 480 7 330 Cr
17 DD Hydro water 722 6 608 Cr
19 110746 Circle Wholesales ✓1 039 5 569 Cr
20 Sundry credit ✓4 437 10 006 Cr
22 CHR 330 9 676 Cr
29 SO Publishers Society membership 350 9 326 Cr
30 Dishonoured cheque: Princeford Books 860 8 466 Cr

b., c.
BOOKS OF ELITE PUBLISHING
Dr CASH BOOK (Bank columns only) Cr
$ $
May 1 Balance ✓7 328 May 2 MLD Books (chq 110744) ✓2 242
2 Sales ✓2 595 3 Palmleaf Stores (chq 110745) 1 833
2 Dass Books Ltd ✓800 3 Circle Wholesales (chq 110746) ✓1 039
18 Sales ✓4 437 5 Abbey Stationery Ltd (chq 110747) ✓1 631
27 Sales 3 375 18 General expenssses (chq 110748) 538
31 Balance c/d 11 252
18 535 18 535
June 1 Balance b/d 11 252 June 1 Water charges DD 722
1 Credit transfer 1 Bank charges 330
Interest 480 1 Publishers Society membership 350
Princeford Books (dishonoured
1 chq) 860
1 Balance c/d 9 470
11 732 11 732
June 1 Balance b/d 9 470

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 Answers to Chapter 7: Control systems

d.
Either:
ELITE PUBLISHING
Bank reconciliation statement at 1 June 2018
$ $
Balance as per bank statement 8 466
Less: unpresented cheques
110745 Palmleaf Stores 1 833
110748 General expenses 538
2 371
6 095
Add: amount not yet credited 3 375
Balance as per cash book 9 470

Or:
ELITE PUBLISHING
Bank reconciliation statement at 1 June 2018
$ $
Balance as per cash book 9 470
Add: unpresented cheques
110745 Palmleaf Stores 1 833
110748 General expenses 538
2 371
11 841
Less: amount not yet credited 3 375
Balance as per bank statement 8 466

Question 31
a.
CITYCHOICE BANK plc
Bank statement for SHIRE CARPETS
Date Details Dr Cr Balance
$ $ $
April 1 Balance ✓4 500 Dr
5 800602 Mungroo Wholesale Ltd ✓2 300 6 800 Dr
8 Sundry credit ✓4,700 2 100 Dr
14 DD Eastern Electricity Ltd 800 2 900 Dr
18 800605 Taylor Textiles ✓1 400 4 300 Dr
28 CHR 500 4 800 Dr

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 Answers to Chapter 7: Control systems

BOOKS OF SHIRE CARPETS

Dr CASH BOOK (Bank columns only) Cr
$ $
April 3 Sales ✓4 700 April 1 Balance ✓4 500
28 Sales 4 200 2 Mungroo Wholesale Ltd (chq 800602) ✓2 300
30 Balance c/d 400 7 Drawings (chq 800603) 400
12 Rent (chq 800604) 700
13 Taylor Textiles (chq 800605) ✓1 400
9 300 9 300
May 1 Balance c/d 1 700 May 1 Balance b/d 400
1 Electricity DD 800
1 Bank charges 500
1 700 1 700
May 1 Balance b/d 1 700

b.
Either:
SHIRE CARPETS
Bank reconciliation statement at 1 May 2018
$ $
Balance as per bank statement (4 800)
Less: unpresented cheques
800603 Drawings 400
800604 Rent 700
1 100
(5 900)
Add: amount not yet credited 4 200
Balance as per cash book (1 700)

Or:
SHIRE CARPETS
Bank reconciliation statement at 1 May 2018
$ $
Balance as per cash book (1 700)
Add: unpresented cheques
800603 Drawings 400
800604 Rent 700
1 100
(600)
Less: amount not yet credited 4 200
Balance as per bank statement (4 800)

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 Answers to Chapter 7: Control systems

Question 32
a.
SECURE BANK plc
Bank Statement for BEST FURNISHINGS
Date Details Dr Cr Balance
$ $ $
June 1 Balance ✓4 233 Dr
6 Credit transfer: Homeware Retail 1 220 3 013 Dr
9 374112 Lakeford Ltd ✓1 885 4 898 Dr
11 DD Regional Power Supplies plc 478 5 376 Dr
16 CHR 612 5 988 Dr
17 374116 ✓675 6 663 Dr
21 Sundry credit ✓2 083 4 580 Dr
26 374113 ✓417 4 997 Dr
28 SO Best Properties plc 840 5 837 Dr

BOOKS OF BEST FURNISHINGS

Dr CASH BOOK (Bank columns only) Cr
$ $
June 17 Sales ✓2 083 June 1 Balance ✓4 233
29 Sales 4 114 3 Lakeford Ltd (chq 37412) ✓1 885
30 Balance c/d 3 183 8 General expenses (chq 37413) ✓417
9 Water charges (chq 37414) 630
12 Castle Furnishings plc (chq 37415) 592
13 Drawings (chq 37416) ✓675
24 Lakeford Ltd (chq 37417) 948
9 380 9 380
July 1 Credit transfer July 1 Balance b/d 3 183
Homeware 1 Electricity DD 478
Retail 1 220 1 Bank charges 612
1 Balance c/d 3 893 1 SO Best Properties plc 840
5 113 5 113
July 1 Balance b/d 3 893
b.
Either:
BEST FURNISHINGS
Bank reconciliation statement at 1 July 2018
$ $
Balance as per bank statement (5 837)
Less: unpresented cheques
37414 Water charges 630
37415 Castle Furnishings Ltd 592
37417 Lakeford ltd 948
2 170
(8 007)
Add: amount not yet credited 4 114
Balance as per cash book (3 893)

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 Answers to Chapter 7: Control systems

Or:
BEST
FURNISHINGS
Bank Reconciliation Statement at 1 July 2018

$ $
Balance as per cash book (3 893)
Add: unpresented cheques
37414 Water charges 630
37415 Castle Furnishings Ltd 592
37417 Lakeford ltd 948
2 170
(1 723)
Less: amount not yet credited 4 114
Balance as per bank statement (5 837)

c.
Steven’s business will benefit from the monthly preparation of bank reconciliation statements
because this process will:
• ensure the business’s cash book is up to date, for example by identifying any transactions
recorded in the bank statement but overlooked when preparing the cash book (such as bank
charges)
• ensure that there will be a check that will identify any errors in the cash book or in the bank
statement (for example, if the amount of a cheque has been mis-recorded by the business or
by the bank)
• help identify any fraudulent activity affecting the business’s bank account.
Question 33
a.
BOOKS OF SOPHIA THOMAS
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
July 31 Credit transfer July 31 Balance b/d 885
Excel Products 1 040 31 Bank charges 596
31 Balance c/d 922 31 Insurance SO 481

1 962 1 962
Aug 1 Balance b/d 922

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 Answers to Chapter 7: Control systems

b.
Either:
SOPHIA THOMAS
Bank reconciliation statement at 31 July 2018
$ $
Balance as per bank statement (2 083)
Less: unpresented cheques
H Khan 947
3 030
Add: amount not yet credited 2 108
Balance as per cash book 922

Or:
SOPHIA THOMAS
Bank reconciliation statement at 31 July 2018
$ $
Balance as per cash book (922)
Add: unpresented cheque
H Khan 947
25
Less: amount not yet credited 2 108
Balance as per bank statement (2 083)

Develop your exam skills

Paper 1
1. A  2. B  3. D  4. D  5. B  6. A  7. D  8. B
9. B   10. B   11. B    12. A    13. C  14. B   15. C 16. C

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 Answers to Chapter 7: Control systems

Paper 2 Further questions on control systems

Question 17
JOURNAL
$ $
Account payable: L Spencer 640
Account payable: Spencer Ltd 640
Correction of error of commission
Sales returns 310
receivable: Dillon Cousins 310
Correction of error of omission
Office equipment 850
Purchases 850
Correction of error of principle
Bank 90
Account payable: Aspen Products 90
Correction of error of original entry
Sales 100
Account payable 100
Correction of compensating error
Operating expenses 1 500
Bank 1 500
Correction of error of complete reversal

Question 18
JOURNAL
$ $
Account payable: D Elias 109
Returns outwards 109
Correction of error of original entry

Equipment 180
Discounts received 180
Correction of compensating error

Account receivable: L White 1 480

Account receivable: T Wright 1 480
Correction of error of commission

Account receivable: Laurelle Wray 120

Bank 120
Correction of error of omission

Carriage inwards 1 660

Bank 1 660
Correction of error of complete reversal

21 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

Question 19
a.
JOURNAL
$ $
Account receivable: L Finch 14
Account receivable: S Finch 14
Correction of error of commission

Discounts allowed 3
Suspense 3
Correction of omission of entry

Machinery 3 000
Purchases 3 000
Correction of error of principle

Account receivable: P Taylor 940

Bank 940
Correction of error of complete reversal

Suspense 100
Sales 100
Correction of miscast sales total

Drawings 80
Cash 80
Correction of error of omission

Suspense 50
Account payable 50
Correction of omission of opening balance

b.
Dr Suspense account Cr
$ $
Sales 100 Balance 147
Account payable 50 Discounts allowed 3
150 150

22 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

Question 20
a.
JOURNAL
$ $
Suspense 25
Discounts received 25
Correction of omission of entry

Account payable: M Williams 17

Suspense 17
Correction of omission of returns entry
Vehicle 1 800
Account payable 1 800
Correction of error of original entry

Suspense 4
Discounts allowed 4
Correction of error of overcast discounts

Bad debts 760

Account receivable: UTV Ltd 760
Correction of error of complete reversal

Suspense 5
Drawings 5
Correction of misposted drawings

Suspense 153
Sales 153
Correction of misposted sales
b.
Dr Suspense account Cr
$ $
Discounts received 25 Balance 170
Discounts allowed 4 M Williams 17
Drawings 5
Sales 153
187 187

Question 21
Dr Accounts payable control account Cr
$ $
Apr 1 Opening balance 640 Apr 1 Opening balance 22 470
30 Payments 46 330 30 Purchases 48 410
30 Discounts received 760 30 Balance c/d 210
30 Purchases returns 930
30 Balance c/d 22 430
71 090 71 090
May 1 Balance b/d 210 May 1 Balance b/d 22 430

23 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

Dr Accounts receivable control account Cr

$ $
Apr 1 Opening balance 14 790 Apr 1 Opening balance 330
30 Credit sales 51 830 30 Sales returns 1 240
30 Closing balance c/d 480 30 Receipts 53 510
30 Discounts allowed 440
30 Closing balance c/d 11 580
67 100 67 120
May 1 Balance b/d 11 580 May 1 Balance b/d 480

Question 22
Dr Accounts payable control account Cr
$ $
Jan 1 Opening balance 440 Jan 1 Opening balance 29 780
31 Payments 64 390 31 Purchases 73 550
31 Discounts received 2 080 31 Interest charges 140
31 Purchases returns 4 830 31 Balance c/d 820
31 Contras 330
31 Balance c/d 32 220
104 290 104 290
Feb 1 Balance b/d 820 Feb 1 Balance b/d 32 220

Dr Accounts receivable control account Cr

$ $
Jan 1 Opening balance 33 640 Jan 1 Opening balance 730
31 Credit sales 95 460 31 Sales returns 3 110
31 Dishonoured cheques 730 31 Receipts 85 370
31 Interest charges 80 31 Discounts allowed 1 140
31 Refunds 280 31 Bad debts 970
31 Closing balance c/d 490 31 Contras 330
31 Closing balance c/d 39 030
130 680 130 680
Feb 1 Balance b/d 39 030 Feb 1 Balance b/d 490

Question 23
a.
BOOKS OF ACE JEWELLERS
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
May 16 Balance b/d 6 960 May 16 Water charges (DD) 580
16 BML Ltd 540 16 Rent (SO) 1 700
16 Bank charges 80
16 Balance c/d 5 140
7 500 7 500
May 16 Balance b/d 5 140

24 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

b.
Either
Bank reconciliation statement at 16 May 2018
$ $
Balance as per bank statement 3 820
Less: unpresented cheques
272104 Electricity 940
272105 B Ramkisson 300
1 240
2 580
Add: amount not yet credited 2 560
Balance as per cash book 5 140

Or
Bank reconciliation statement at 16 May 2018
$ $
Balance as per cash book 5 140
Add: unpresented cheques
272104 Electricity 940
272105 B Ramkisson 300
1 240
6 380
Less: amount not yet credited 2 560
Balance as per bank statement 3 820

Question 24
a.
BOOKS OF PEARLRIVER STORES
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
Sept 5 Balance b/d 148 Sept 5 Electricity (DD) 1 454
5 Scott-Lee Ltd 1 120 5 Rent (SO) 2 960
5 Balance c/d 3 386 5 Charges 240
4 654 4 654
Sept 5 Balance b/d 3 386

25 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

b.
Either
Bank reconciliation statement at 16 May 2018
$ $
Balance as per bank statement (1 562)
Less: unpresented cheques
372710 Perrier & Co. 3 630
372712 Insurance 1 052
4 682
(6 244)
Add: amount not yet credited 2 858
Balance as per cash book (3 386)

Or
Bank Reconciliation Statement at 16 May 2018
$ $
Balance as per cash book (3 386)
Add: unpresented cheques
372710 Perrier & Co. 3 630
372712 Insurance 1 052
4 682
1 296
Less: amount not yet credited 2 858
Balance as per bank statement (1 562)

Question 25
a.
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
Oct 31 Balance b/d 14 370 Oct 31 Water charges (DD) 320
31 VTN Products 330 31 Bank charges 190
31 Balance c/d 14 190
14 700 14 700
Oct 31 Balance b/d 14 190

b.
Either
Bank reconciliation statement at 31 October 2018
$ $
Balance as per bank statement 14 560
Less: unpresented cheques
V Chadee 740
L Nanan 1 130
1 870
12 690
Add: amount not yet credited 1 500
Balance as per cash book 14 190

26 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019
 Answers to Chapter 7: Control systems

Or
Bank reconciliation statement at 31 October 2018
$ $
Balance as per cash book 14 190
Add: unpresented cheques
V Chadee 740
L Nanan 1 130
1 870
16 060
Less: amount not yet credited 1 500
Balance as per bank statement 14 560

Question 26
a.
ZAMRAN
Dr CASH BOOK (Bank columns only) – UPDATED Cr
$ $
May 31 Interest refund 112 May 31 Balance b/d 16 584
31 Balance c/d 17 136 31 Standing order 484
31 Bank charges 90
31 Trade receivable (error) 90
17 248 17 248
May 31 Balance b/d 17 136

b.
Either
Bank reconciliation statement at 31 May 2018
$ $
Balance as per bank statement (14 136)
Less: unpresented cheque
Supafuels Ltd 3 000
Balance as per cash book (17 136)

Or
Bank reconciliation statement at 31 May 2018
$ $
Balance as per cash book (17 136)
Add: unpresented cheque 3 000
Supafuels Ltd
Balance as per bank statement (14 136)

27 Principles of Accounts for CSEC®, 2nd edition © Oxford University Press 2019