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Dear sir,
The total receiveables are underadded by $25000.. The only correction entry in the answer is:
No Debit
Suspense(Cr) $25000
How on earth could this happen? No debit? No dual aspect concept application??There is nothing to say that all of the original double entries were not done correctly.
All that has happened is that the account has been added up wrongly – therefore the trial balance does not balance, and therefore we create suspense account of the difference.
When the addition is corrected, the debit balance on the trial balance is corrected. We ‘credit’ the suspense account and therefore the balance on the suspense account is zero.
As you will know from the lecture (I assume you have watched the lecture) the suspense account is not a ‘real’ account – it is only there to keep track of the errors, and any entries to it are not ‘real’ entries anyway.
Right sir.. Thankyou.. And sir if cumulative preference dividend is not paid in the current period than will it appear under current liabilities in the current period??
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