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Sorry for starting a new thread. The last one was closed so i could not continue posting there. This is the last question that was confusing me in the CBE.
Q: Which of the following will result in the creation of Suspense Account?
A. The debit side of Purchases Account was overstated when balancing off the account at the end of period.
B. A sale was recorded by debiting Sales and crediting Cash.
C. The purchase of delivery van was debited to Repairs account.
D. Payment of $600 from a credit customer was incorrectly recorded as $400 in cash book.I selected D. I thought both A & D should be correct. Spent a long time on this question both first time as well as when rechecking the answers.
Really sorry for starting a new thread. Thanks in advance.
The correct answer is A.
The balance from the purchases account will be wrong in the trial balance but no other accounts will have been affected.
D is wrong because although the wrong figure has been entered in the cash book, it will also be wrong in the total entered in the Payables Ledger Control Account and so the trial balance would still balance.
Thanks for the answer sir.
I’m still confused as how can we assume that the right amount would have been recorded in Payables Control Account?
By looking at the sentence, i couldn’t figure it out in the exam. I changed my answer almost 3-4 times from A to D.
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