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Question:
The suspense account shows a debit balance of $100. What could this balance be due to?A Entering $50 received from A Turner on the debit side of A Turner’ s a/c.
B Entering $50 received from A Turner on the credit side of A Turner’ s a/c.
C Undercasting the sales day book by $100.
D Undercasting the purchases a/c by $100.The question ask me what is the reason for this difference between debit side and credit side of Trial balance.
(1) I have read your answer before that correct choice is D.
(2) I also know A, B, C is incorrect answer in this question.
But I am still confused about the answer because of the following reasons:– First, I think “debit balance” in any accounts means that Total CR > Total DR in this account (ie “debit balance” of $100 in suspense account meaning CR suspense account $100; T-account for it is: T-account (suspense account) — DR side: — CR side: b/f $100)
– Second, when undercasting the purchases a/c by $100, the double entry will be:
DR Suspense account $100 / CR Payables $100
– Third, in the second reason, I have debited Suspense account. So in this case, I think Suspense account has Total DR > Total CR, which contradicts first reason.Please check the accuracy of my thinking, thank you so much.
In general a debit balance on an account means that that account has more debits then credits.
As far as the suspense account is concerned, the balance is created to make the trial balance add up – so if the total of the credit balances is more than the total of the debit balances (because there has been a mistake) then indeed we ‘invent’ a debit balance on the suspense account to make the trial balance add up.The balance on the purchases account is a debit because it is an expense. If the account has been undercast/underadded, then it means that the debit is too small. So to correct it we debit purchases (and credit suspense).
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