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The trial balance has a suspense account with a credit balance of $800.
Which one of the following errors would fully account for the balance on the suspense account?-$400 paid for plant maintenance has been correctly entered in the bank general ledger account and credited to the plant asset account.
-Credit note issued to a customer of $400 has been debited to trade receivables.
-A receipt of $800 for commission receivable has been omitted from the records
-The petty cash balance of $800 has been omitted from the trial balance.
I keep getting confused with with if we need the suspense account figure before or after the error has been corrected?
and for the 2nd error, does it mean they have only entered
Dr trade receivables 400 and there is no credit entry, where the correct entry should have been
Dr sales 400, Cr trade receivables 400
i don’t understand how this would create a Dr suspense of 800The credit note should have been credited to receivables but they have debited receivables by mistake (we would assume that the other entry (I.e. debit sales) had been done correctly.
So this is why the trial balance does not balance and so there is a suspense account.
To correct the error they would credit receivables with 800 (400 to cancel the wrong debit and another 400 to put the correct credit entry).
The double entry would then be to debit the suspense account with 800 which would clear the current balance on suspense of 800.Have you watched m y free lectures on suspense accounts?
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