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O-LevelAccountingVerification of accounting records7707/22 · May/June 2025 · Q420 Marks

Bilal prepared a trial balance at 31 December 2024. Bilal later discovered the following errors. 1 Goods taken for Bilal's own use, costing $185, had been recorded as cash drawings. 2 Motor expenses, $63, paid by bank transfer, had been recorded as $36. 3 Capital introduced by Bilal, $2000, had been credited to a bank loan account. 4 A purchase invoice, $84, from Maya, had been debited to the account for Moira and credited to the purchases account. 5 Bilal's private insurance, $130, had been recorded as business insurance.

  1. (a)Prepare the journal entries on page 15 to correct errors 1–5. Narratives are not required.[11]
  2. (b)The balance on the capital account at 1 January 2024 was $6200. Before correcting the errors: • original profit for the year was $12930 • drawings were $11260. REQUIRED (b) Calculate Bilal's profit for the year after correcting errors 1–5.[5]
  3. (c)Calculate the balance on the capital account at 31 December 2024.[4]

Mark scheme

Marking points from the official mark scheme (May/June 2025). The mark or mark type is shown in brackets.

  1. [1] Error 1 Cash Debit 185
  2. [1] Error 1 Purchases Credit 185
  3. [1] Error 2 Motor expenses Debit 27
  4. [1] Error 2 Bank Credit 27
  5. [1] Error 3 Bank loan Debit 2000
  6. [1] Error 3 Capital Credit 2000
  7. [1] Error 4 Purchases Debit 168
  8. [1] Error 4 Moira Credit 84
  9. [1] Error 4 Maya Credit 84
  10. [1] Error 5 Drawings Debit 130
  11. [1] Error 5 Insurance Credit 130
  12. [1] Original profit for the year 12930
  13. [1] Error 1 185
  14. [1] Error 2 (27)
  15. [1] Error 4 (168)
  16. [1] Error 5 130
  17. [1] Draft profit for the year after correcting errors 13050 OF
  18. [1] Capital at 1 January 2024 6200
  19. [1] Revised draft profit 13050 OF
  20. [1] Capital introduced 2000
  21. [1] Less Drawings (11260 + 130) (11390)
  22. [1] Capital at 31 December 2024 9860 OF

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About this question

Topic
Verification of accounting records, O-Level Accounting (syllabus 7707). Structured question, 20 marks.
Source
O-Level Accounting, May/June 2025 Paper 2 Variant 2, question 4.

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