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John Moffat.
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sadafwaheed1
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Petty cash book balance of 500$ ommited from Trial balance .
How can this mistake lead to creation of suspense account it’s an error of ommision . What’s the double entry for petty cash?
John Moffat
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Petty cash is a debit balance and if it is not listed on the TB then the TB will not balance. Therefore a debit balance appears on the suspense account.
To correct the error we debit petty cash on the TB and credit the suspense account.
Have you watched my free lecture 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.
(This is not an error of omission. An error of omission is then a complete double entry is missed out which is not the case here.)
sadafwaheed1
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