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July 24, 2020 at 11:29 am
At question C, we work with the error on the suspense account.
Considering that this error will definitely arise in the bank recon, is it safe to say that we leave this error now because it will balance throughout the TB, but leave it so that in the bank recon it can be dealt with?
The bank statement will show the $200 payment And the books will show $20 Accountant will adjust later on with $180 correction.
Does this mean we do the suspense account before we do the bank recon?
John Moffat says
July 24, 2020 at 1:17 pm
This error does not affect the suspense account at all because the trial balance will still balance.
The most likely way in which the error is discovered is when the bank reconciliation is done.
March 10, 2020 at 1:23 am
Hi SIR, Sir I wanna know that the errors which doesn’t effects the Trial Balance, does these errors effect the Financial Statements? I’ll be thankful for your time.
March 25, 2019 at 2:38 pm
On suspense accounts example 2 – I ignored part (c) but for the wrong reason. I could see that the mistake had been recorded throughout, and so would not make the trial balance unbalanced, but I looked at part (b), which is the balance on the electricity account should be £615. I assumed that this superceded part (c) and meant that the electricity account was now correct. I’m sure this would be clearer in an exam question scenario but just in case it isn’t, should we always assume that all points need to be addressed in this type of question scenario, and that there are no “curved balls”? The problem I have is because the exam appears to be full of curved balls in its questions, the trick is knowing what is one, and what isn’t!!
March 25, 2019 at 7:56 pm
There is no ‘curve ball’.
Part (b) cannot have superceded part (c).
Part (b) says that the balance was recorded wrongly on the trial balance. Part (c) says that an entry had been recorded wrongly in the account. Therefore the balance on the account must have been wrong, but it is the balance that had been recorded.
March 19, 2019 at 6:53 am
murphyjohn89: The normal double entry is not as you have written it.
It is Dr Telephone (because it is an expense) and Cr Accruals (for the liability).
Have you watched the free lectures on accruals?
March 18, 2019 at 6:16 pm
Fo the suspense question example no 2 on your notes i dont get the below part could you explain a bit further please
When accounting for the telephone accrual of $70 at the year end, a single entry had been made. It was the expense account entry that had been missed out
the normal double entry for the above is cr accruals with 70 and dr telephone with 70
so would it not be cr accruals with 70 and dr suspense with 70 as the telephone expense had been missed out
so to take it out of suspense you would
dr telephone 70 cr suspense 70
August 3, 2018 at 11:45 am
Hi sir, I have little silly question.
In Example 2 C) One cash payment for electricity of $200 had been recorded throughout as $20
I can not recognize when the error applies to both accounts in this case in electricity a/c and cash a/c. I understood that only in cash account have mistake. This means in electricity a/c still Dr of $200.There are many similar questions that confuse me.
Thank you in advance!
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