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dear All,
could you please clarify what’s the impact on trial balance of The petty cash book balance $500 omission from the trial balance?
Thanks a lot.
Q’s trial balance failed to agree and a suspense account was opened for the difference. Q does not keep receivables
and payables control accounts. The following errors were found in Q’s accounting records:
(1) In recording an issue of shares at par, cash received of $333,000 was credited to the ordinary share capital
account as $330,000
(2) Cash $2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset
account
(3) The petty cash book balance $500 had been omitted from the trial balance
(4) A cheque for $78,400 paid for the purchase of a motor car was debited to the motor vehicles account as
$87,400.
Which of the errors will require an entry to the suspense account to correct them?
A 1, 2 and 4 only
B 1, 2, 3 and 4
C 1 and 4 only
D 2 and 3 onlyHi,
I believe that the trial balance would not match as an impact of omitting petty cash book balance of $500.
Think it this way:
Q has completely omitted the balance i.e the debit side of the trial balance will be short of $500.So the answer should be B (all four will require an entry to the suspense account to correct them)
Does that match with your answer?
I have problem with this same question but in error no 1.I need detailed solution of error no 1.
For error number 1, they have debited cash with 333,000 and credited share capital with only 330,000. So the debit does not equal the credit, therefore the trial balance will not balance, therefore an entry is needed in the suspense account.
(Dr Suspense account; Cr Share capital)
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