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Dear Sir,
I am doing an exercise from a study bank and I am confused as I found twice the same question with 2 different answers…
The question is to prepare the journal entries to correct the errors spotted in the TB.
Error is: Sales day book is undercast by $300.My answer is:
Dr Suspense Account 300
Cr Sales (300)But I also saw:
Dr AR 300
Cr Sales (300)
Explanation: correction of casting error in sales day book, has no effect on suspense account.Could I please ask you what is the correct answer: does this error impact the suspense account?
Thank you very much in advance for your help and again congratulations for all the work done to help us out for the exams.
Dear Sir,
I think I just found the explanation by myself, may I ask you to correct me if I am wrong?If the company maintains control accounts, errors on the sales journal do not impact the suspense account but the AR. Reason is: we use the total balance from the AR control account to post it in the GL against Revenue, so the TB will balance.
If the company does not maintain control accounts, then we need to correct the error in the TB using the suspense account.
Am I correct?
Thank you very much
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