Example

Your bookkeeper extracted a trial balance on 31 December 2004 which failed to agree by £180, a shortage on the debit side of the trial balance. A suspense account was opened for the difference. In February 2005, the following errors, made the previous year, were found:

1. Goods purchased on credit from E Lewis of £230 was entered correctly in the purchases account but was entered in the personal account as £320.
2. Advertising paid for £115 by cheque had been completely omitted from the books
3. Discounts received of £80 cash was entered on the debit side of both accounts.
4. Purchases daybook had been undercast by £250.