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Hi John
I have watched the lecture over and over again but I am still unsure:
A suspense account was opened when a trial balance failed to agree. The following errors were later discovered.
– A gas bill of $420 had been recorded in the gas acct as $240
– A sales invoice to a customer for $50 had been credited to accts receivable
– Interest received of $70 had been entered in the bank account onlyWhat was the original balance on the suspense account?
My workings:
Dr Accts receivable $50
Cr Sales $100
Dr suspense account???I am stuck on how to solve this.
Why is the sales invoice figure of $100 credited to the suspense account?
Please help
Thanks
Hi John
Is it because I’m looking at correcting the accounts receivable error so I:
Dr Accounts receivable
Cr Suspense accountBut what about the sales account?
Thanks for all your help
The sales invoice should have been debited to receivables, not credited.
Therefore we need to debit receivables with $100 to correct it.
There is no mention of the entry in the sales account having been wrong so they will have credited sales which is correct.
Therefore the correcting entry is to debit receivables 100 and credit suspense account 100.
I think my confusion is when I incorporate double entry which leads me to exclude the suspense account, but I need to concentrate only on the error entry and correct that. I will have to practice more on this section.
Thanks John, really appreciate your help
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