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Hallo,
In the example:
When the trial balance was prepared a suspense account was opened. These errors were discovered:
(i) Opening inventory of $2,000 was omitted from the trial balance.
(ii) $400 was received from a customer whose debt had been written off and the bookkeeper credited the bad debts expense account and the receivables control account and debited cash.What was the balance on the suspense account?
Answser: $2,400 debitExplanation:
Opening inventory is a debit, so omitting it puts $2,000 debit into suspense. Then, when cash was received from the written off receivable the entries made were debits of $400 and credits of $800, putting another $400 debit into suspense.My Q: Why if the credits were 800 – e.g.
Cr Irrec. debt 400
Cr Receivables 400
= Cr 800
– the suspense a/c is not debited with 800? Or, only one time 400 is counted, so the suspense a/c is also debited only once with 400?Thank you!
Suspense a/c is credited once. No cash was given away by the creditor. So the cash received will only get a single cash debit and irrecoverable debts credit entry both by 400 as to balance the trial balance.
Hallo,
They said that they have:
“credited the bad debts expense account and the receivables control account and debited cash”, so the entries to find the balance of the suspense a/c will be:
Dr Cash 400
Cr Suspense a/c 400Cr Irrec. debt 400
Cr A/R 400
where is the debit to this?– or how will the entries be?
Thank you!
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