- October 19, 2015 at 5:46 pm #277605qaz360Member
- Topics: 13
- Replies: 12
The totals of the a company’s trial balance are as follows debit $635,000 credit $627,500.
Which of the following errors in isolation could account for the difference?
1. The omission from the trial balance of an accruals account totalling $7,500.
2. The rent expense account of $7,500 has been recorded twice in the trial balance.
3. The omission from the trial balance of a prepayment account totalling $7,500.
4. Discounts received of $3,750 has been credited in error in the payables control account.
(A) None of the above
(B) 1,2 and 4
(C) 1 and 2
(D) 2,3 and 4
I have no idea at all except the #4 will create a suspense account…………..
And according to another question which was finding errors that would require the use of a suspense account to correct the error, said a choice,”Depreciation expense has been recorded twice.” would require correcting but would not require a suspense account because it will not lead to an imbalance in the trial balance. For that reason, I thought the #2 which says the rent expense recorded twice will not lead to an imbalance in the trial balance.
Anyway, the question is asking to find which would lead to an imbalance in the trial balance right? Would you please explain further? I need some detailed explanations.
Last but not least,
Could you please check if I got this question correctly?
A trial balance shows the total of the debits column is $4,000 more than the total of the credits column. which of the following errors would fully account for the difference?
1. Discounts received of $2,000 have been posted as a debit to the discounts allowed account.
2. Sales returns of $4,000 have been only credited to the receivables ledger control account.
3. A contra of $4,000 has only been recorded in the receivables ledger control.
(A) 1 only
(B) 1 and 2
(C) 1 and 3
How I understand is,
A suspense account of $4,000 will be needed because the debit was greater than credit. And in order to cancel out the suspense account, I was required to find out DR. of the suspense acct.
#1, Discounts received had to be recorded as Cr. which is an income, but it was posted as a debit. In order to correct this error, Dr. Suspense acct. $4,000 (which is double the amount, $2,000), Cr. DR $2,000 (to record properly) and Cr. DA $2,000(to remove the error).
#2, No suspense acct. will be needed because there was an omission in control acct which will not affect the balance of the trial balance.
#3, Dr. payables $4,000 and Cr. suspense acct. $4,0000 to record contra.
And so, only #1 will fully account for the difference.
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