Gail Dawson is the owner of a retail business. She has employed an inexperienced bookkeeper to maintain her accounting records.

(a) On 31 March 2012, the end of the business’s accounting year, the bookkeeper extracted the following trial balance from the business’s records:

Required: 1 A corrected version of Gail Dawson’s trial balance dated 31 March 2012 based on the above information, but with an amended figure for the suspense account.

(b) The following errors were found in the accounting system after a corrected version of the trial balance above was prepared. (i) The total of the sales day book for December 2011 had been overstated by £120. (ii) In January 2009 some new office equipment had been purchased for £360; this had been debited to the purchases account. (iii) A payment by cheque to a creditor, £216, had been entered in the books as £261. (iv) A credit note for £37 sent to a customer had been overlooked. (v) The owner had withdrawn a cheque for £80 for private use in October 2008; both the bank and drawings account had been credited with this amount. Required: In the books of Gail Dawson 2 Journal entries to correct each of these errors. (Note: narratives are NOT required.) 3 The suspense account. (Start with the amount in the corrected trial balance given in answer to Required 1 above, and include any entries arising from the correction of the errors.) 4 An explanation of the term ‘error of commission’.

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Non-current assets at cost Provision for depreciation of non-current assets, 1 April 2011 Inventory Trial Balance at 31 March 2012 1 April 2011 31 March 2012 Trade accounts receivable Trade accounts payable Balance at bank (overdrawn) Capital Drawings Sales Purchases Running expenses Allowance for doubtful debts Suspense Dr 18,300 2,800 3,700 864 382 7,740 26,080 6,904 90 66,860 32 2,960 1,825 26,860 18,327 16,888 66,860