suspense Accounts

This topic contains 2 replies, has 3 voices, and was last updated by Profile photo of jamie88 jamie88 2 years, 7 months ago.

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author

  • avatar
    • Topics: 5
    • Replies: 2

    The totals on the trial balance of Blue were
    Debit $23,200
    Credit $24,100
    and a suspense account was opened for the difference
    The following were found:
    1. a receipt from a customer of $2300 had been entered correct in the cash account, but had been posted to the receivables account as $3200.

    2. a payment of $8000 for a car had been correctly entered in the cash account, but had been posted to the credit of the motor repairs account.

    What balance will remain on the suspense account after correction of these errors.

    Profile photo of targetacca
    • Topics: 20
    • Replies: 17

    difference between cr 24100 and dr 23200 is 900. debit is lower , so to balance, u debit suspense a/c by 900. so initial suspense a/c balance is 900.

    1. correct entry should be
    dr cash 2300
    cr receivables 2300

    entry recorded was
    dr cash 2300
    cr receivables 3200
    (here the cr is more than debit by 900, hence we put debit suspense as 900 so both sides r equal that is
    dr cash 2300
    dr suspense 900
    cr receivables 3200

    Now to remove the suspense balance we pass the entry
    dr receivables 900 (now the receivables has got the correct balance ie cr 3200 – dr 900 = cr 2300)
    cr suspense 900 ( to remove the suspense balance)

    2. correct enty should be
    dr car 8000
    cr cash 8000

    entry recorded was
    cr cash 8000
    cr motor repair 8000
    now there is only cr side for this equation which is 16000 and no debit side , so we put 16000 dr on the suspense a/c

    dr suspense 16000
    cr cash 8000
    cr motor repair 8000

    to remove suspense balance the entry wud b
    dr car 8000
    dr repair 8000(this offsets the earlier cr balance on repair a/c)
    cr suspense 16000(this offsets the dr balance on suspense a/c)

    so suspense a/c balance will be dr 900 (opening balance)
    cr 900 (from error 1)
    cr 16000( from error 2)

    so final balance on suspense a/c will be cr 16000. correct me if am wrong.

    Profile photo of jamie88
    • Topics: 0
    • Replies: 1

    Thanks u so much

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.