Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › CORRECTION OF ERROR AND SUSPENSE ACCOUNT
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- May 14, 2021 at 5:42 am #620539
(2) Bank charges of $440 appeared in the bank statement in December 20X5 but had not been
entered in the company’s records.CORRECT ENRTY – BANK CHARGES DEBIT $400
TO CASH/ BANK CREDIT $400THIS MEANS THE FOLLOWING ENTRY HAS BEEN PASSED SINCE IT APPEARED IN BANK STATEMENT
ENTRY PASSED – SUSPENSE AC DEBIT $400
BANK CHARGES DEBIT $0
TO CASH/ BANK CREDIT $400CORRECTION ENTRY WOULD BE AS FOLLOWS
CORRECTION ENTRY – BANK CHARGES DEBIT $400
TO SUSPENSE A/C CREDIT $400Note – In the textbook it is shown that this entry would have no effect on the trail balance since both debit and credit have not been recorded but isnt that wrong since it is shown in the bank statement that means it has been debited and there is no corresponding credit and it should have an effect on trail balance and a suspense account should be created . where am i wrong?
thanks in advance
May 14, 2021 at 9:16 am #620562Please do not type in capital letters.
The bank statement is not the same thing as the cash account.
The bank has subtracted changes on the bank statement, but the company has not entered it in their books. There has been no debit and no credit and therefore the trial balance will still balance.
Have you watched my free lectures on bank reconciliations and on suspense accounts? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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