- This topic has 7 replies, 3 voices, and was last updated 14 years ago by
.
- Posts
DR side of trial balance 50 more than credit side. this is the due to below.
A- a purchase of goods for $50 being omitted from the supplier’s account.
We have crd balance of 50 in suspense account. to make it balance we need DR entry. how is this going to work out?
if we omit the purchase entry this will make another 50 quid credit entry in suspense .. i dont understand this?
what is it got to do with suppliers account???
cheers
leylafirst you should consider what type of error is this. this is the single sided entry in which trial balance doesnt balance. purchases are debited but payables which we credit is ommited so thats why TRIALS BALANCE’s debit side is more that credit by 50. so this means cr side’s balance is posted to suspence account now there is balance in the credit side so when you come to know the exat account of this balance which is payable you make this entry:
dr suspence account 50
cr payables 50now trial is balance and no balance in the suspence account.
ALWAYS REMEMBER WHEN TRIAL BALANCE IS NOT BALANCE WE CREATE SUSPENCE ACCOUNT , it is temporary account for the balance which we do not know where to put it. hopw this answer your question!so suppliers account mean is payable. I thought purchases omitted. it is kind of strange wording for payable.
thank very muchwhen there is a cash purchase what u do
dr purchase
cr cash
and in the question suppliers name is use it means it is not a cash transaction and should be credit transaction
dr purchase
cr supllier (payable)yes, customer account means a receivable, because a customer owes something to us, (since he had purchased something from us for credit and hasn’t paid for it yet), so we have something to receive from him, that’s why a customer is a receivable..
You can call it Receivables or Trade Receivables or Receivables Control..
The same is the case with supplier who is called a Payable or Trade Payable or Payable Control..@abdulwahabsiddiq said:
first you should consider what type of error is this. this is the single sided entry in which trial balance doesnt balance. purchases are debited but payables which we credit is ommited so thats why TRIALS BALANCE’s debit side is more that credit by 50. so this means cr side’s balance is posted to suspence account now there is balance in the credit side so when you come to know the exat account of this balance which is payable you make this entry:
dr suspence account 50
cr payables 50now trial is balance and no balance in the suspence account.
ALWAYS REMEMBER WHEN TRIAL BALANCE IS NOT BALANCE WE CREATE SUSPENCE ACCOUNT , it is temporary account for the balance which we do not know where to put it. hopw this answer your question!@abdulwahabsiddiq said:
when there is a cash purchase what u do
dr purchase
cr cash
and in the question suppliers name is use it means it is not a cash transaction and should be credit transaction
dr purchase
cr supllier (payable)Very well explained…I’ve given you a thumbs up! 🙂
- You must be logged in to reply to this topic.