https://opentuition.com/acca/f3/adjustments-to-profit-and-suspense-accounts-part-b/
Hello, Sir!
In the above-posted lecture, you solved a suspense account question in which you posted the trial balance difference on the credit side of the suspense t Account. My question to you is how can we know if the balance is right on the debit side or credit side of the trial balance?
In the question, it was stated that debit side of Tb was 12000 something and credit side was 11000 something (don't remember exact values). you posted on the credit side for the difference, although the debit side could have been wrong?
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10y ago#1The trial balance should balance, and so if the debit side is more than the credit side then it needs an extra credit to make it balance.
so you're saying, whatever side the balance in the TB is more, we should find the difference and post it on the side where the balance was less?
10y ago#3Yes - we use the suspense account to make the TB balance.
Thank you!
10y ago#5You are welcome :-)
I'm sorry, but I'm confused by one question for suspense account;
When Jayesh extracted a trial balance from his books at 31 December 2010 he found it that it did not balance... Jayesh later found this error.
Repairs to a machine, $3500, had been posted to machinery at cost account as $5300.
What would be the journal entry for this and why?
10y ago#7There are actually two errors. One is obviously that the amount has been entered incorrectly - they have debited with 1,800 too much.
The other error is that it should have been debit to repairs but it has been debited to machinery at cost.
So to correct both errors we need to:
Debit Repairs 3,500 (to enter the correct figure in the correct account)
Credit Machinery at cost 5,300 (to remove the figure that should not have been there)
Debit Suspense account 1,800 (because the error in the amount will have stopped the trial balance from balancing)
oh alright now I get it! Many many thanks sir! :)
10y ago#9You are welcome :-)
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