Forums › FIA Forums › FA1 Recording Financial Transactions Forums › Suspense account cannot balance (2)
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- October 23, 2024 at 2:55 pm #712661
D. Haynes extracted a Trial Balance at 31 March 2024 and found that it did not balance. He posted the difference to a Suspense account. Later, he found the following errors which accounted for the difference:
1) The total of $365 for Discount Allowed for the month of November 2023 had been posted to the credit side of Discount Received account.
2) A payment of $210 to Haynes from a debtor T. Hall had been posted to the credit of T. Ball in error.
3) Haynes had paid $2640 wages and supplied materials costing $960 to his own employees in building a store at the rear of his factory. No adjustment had been made.
4) A payment of $56 for postage had been posted to that account as $65.
5) Haynes purchased new fittings for his factory costing $1800, but this transaction had been posted to the Purchases account.a) Prepare the journal entries necessary to correct the errors and omission.
b) Prepare the Suspense account, showing the original difference in the Trial Balance. (dr bal 721)I can’t seem to reach the debit balance of 721. Here are my working:
1) Dt Discount received ($365), Discount allowed ($365) | Ct Suspense ($730)
2) Dt T.Ball | Ct Suspense ($210), Dt Suspense | Ct T.Hall ($210)
3) Dt Wages ($2,640), Dt Building materials ($960) | Ct Suspense
4) Dt Suspense | Ct Postage ($9)
5) Dt Suspense | Ct Purchase ($1,800), Dt Furniture & fittings | Ct Suspense ($1,800)October 24, 2024 at 3:20 pm #712830To cause a suspense account, one sided errors must have been committed. Eg do the Cr but not the Dr or not listing an account in the TB.
1 Should be 365 Dr to discounts allowed. Error on TB is 2 x 365 = 730 too much Cr so a Dr on suspense account needed to make tb balance.
2 No effect. The Cr was to the wrong person but double entry is maintained.
3 No entries have been made for these items so the TB would still balance. No suspense account effect.
4 9 too much Dr, so a Cr of 9 in suspense account needed.
5 Double entry is complete, though wrong so no suspense account implications.
730 – 9 = 721.
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