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When Q’s trial balance failed to agree, a suspense account was opened for the difference. The trial balance
totals were:
Debit $864,390
Credit $860,930
The company does not have control accounts for its receivables and payables ledgers.
The following errors were found:
1 In recording an issue of shares at par, cash received of $333,000 was credited to the ordinary share
capital account as $330,000.
2 Cash $2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the
plant asset account.
3 The petty cash book balance $500 had been omitted from the trial balance.
4 A cheque for $78,400 paid for the purchase of a motor car was debited to the motor vehicles account
as $87,400.
5 A contra between the receivables ledger and the payables ledger for $1,200 which should have been
credited in the receivables ledger and debited in the payables ledger was actually debited in the
receivables ledger and credited in the payables ledger.What will the balance on the suspense account be after making the necessary entries to correct the
errors affecting the suspense account?
A $2,440 Debit
B $15,560 Credit
C $13,640 Debit
D $3,440 Debitl can not understand some things
please,explain to me thoroughly ,Sir
thanks in advanceIn future, please do not expect me to provide a full answer to a full question. You have an answer in the same book in which you found the question and you should therefore ask about whatever it is in the answer that you are not clear about.
Also, I cannot believe that you have watched my free lectures on suspense accounts, and you cannot expect me to type out my lectures here.
1. The have debited with 333,000 and credited with only 330,000. Therefore there is a missing credit of 3,000. So debit the suspense account with 3,000.
2. They have credited cash and credited another account when they should have debited. So they need debits of 5,600 to correct. Therefore credit the suspense account with 5,600.
3. There is a debit missing of 500. So credit the suspense account with 500.
4. They have credited with 78,400 and debited with 87,400. Therefore there is a missing credit of the difference of 9,000. So debit the suspense account with 9,000.
5. There has been a debit and a credit of the same amount, so the suspense account is not affected.
(Many of the entries above have been made to the wrong accounts, but this is irrelevant as far as the suspense account is concerned. The suspense account is only affected by debits not equalling credits.)
but revision kit’s question require the suspense account entries over such a state
even there is such a question,
which one of these errors will require an entry to the suspense account to correct them..
and the correct answer is 1,2,3,4Firstly, the revision kit does not require the entries in the account (and neither will the exam!). The question required the final balance on the suspense account and I have told you how to arrive at it, and that the entries in the suspense account are!!
Secondly, you are correct that one of the other questions asks which ones will require an entry. If you read my previous post properly, then I have told you that 1, 2, 3, and 4 require an entry, and I have specifically written in my reply that item 5 does not require an entry!!!!
Again, I really cannot believe that you can have watched my lectures on suspense accounts or that you have read my previous reply properly.
Hi tutor, recently I’ve referred your reply to question posted. Your reply at the end always mentions to your free lectures video. So my question is how I can search and see that video?
Thank you and hope your reply
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