Reference no: EM132959449

Question The Trial Balance of Hisham at 30th June 2020 did not agree.

A suspense account was created in order to achieve a balance. Draft Final Accounts were produced from this Trial Balance and it showed that there was Working Capital of RM27,381.

Later, the following errors were discovered:

i. A cheque for RM1, 000 received from W Hong had been credited to the account of H Hong.
ii. A cheque received from R Siva for RM976 had been correctly entered in the Cash Book but had been posted to the Personal Account as RM967.
iii. Bank charges of RM720 had been correctly entered in the Cash Book but the double entry had not been completed.
iv. The purchase of new machinery on 1st June 2020 for RM1,500 had been posted to the Purchase Account. Depreciation is to be ignored.
v. Discounts allowed of RM97 had been credited in error to the Discount Received Account.
vi. Sales of RM372 to S Adam had been posted correctly to the Personal Account, but entered in the Sales Account as RM327.
vii. A sale of RM679 to S Min Ho had not been posted to his personal account.
The balance on the Suspense Account was eliminated by the corrections of the above errors.

Required:
(a) Journal entries to correct items 1 - 7 above
(b) The Suspense Account
(c) A statement showing the effect of the above items on the working capital, indicating the correct figure.
(d) Which errors would not c? Give TWO (2) different types of errors which are not revealed by a trial balance.