Tag: Sole Traders Financial Statements

A sole trader’s trial balance totals were:

Debit £387,642

Credit £379,642

A suspense account was opened for the difference.

Which of the following errors would have the effect of reducing the difference when corrected?

Select ONE answer:

1. The bank deposit balance of £8,000 has been omitted from the trial balance
2. £4,000 received for rental income for part of the office being sublet has been correctly recorded in the cash book but debited to the rent expense account
3. No entry has been made in the records for a cash sale of £8,000
4. £8,000 paid for repairs to plant has been debited to the plant asset account

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct – When the error is corrected there will be a credit entry of £8,000 to rent receivable.
3. Not correct
4. Not correct

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