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F3 Suspense Account BBP Rev Kit

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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August 28, 2015 at 9:51 am #268914
elle
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- Topics: 18
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Hi John,
The following question is about suspense accounts.
A company’s trial balance totals were:
Debit $ 387,642
Credit $ 379,511
A suspense account was opened for the difference.
Which one of the following errors would have the effect of reducing the difference when corrected?
A. The petty cash balance of $ 500 has been omitted from the trial balance.
B. $ 4,000 received for rent of part of the office has been correctly recorded in the cash book and debited to rent account.
C. $ 3,000 paid for repairs to plant has been debited to the plane asset accounts.
D. An invoice for Mr. A Smith for $ 400 has been posted to the account of Mrs B Smith in error.
How is the answer D? I don’t understand the workings. If you could please help.
August 28, 2015 at 4:10 pm #268950
John Moffat
Keymaster
- Topics: 57
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The answer is B (and the BPP Revision Kit shows the answer as B also).
D has no effect on the trial balance.
The reset received should be credited to rent received. It has been debited to the rent account which makes the debits too high.
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