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Hi, this is the question from p.278 in Kaplan’s this year’s F3 text:
The debit side of a company’s TB totals $1,200 more than the credit side.
Which of the following errors would fully account for the difference?
A) The petty cash balance of $1,200 has been omitted from the TB
B) A receipt of $1,200 for commission receivable has been omitted from the records
C) $600 paid for plant maintenance has been correctly entered into the cash book and credited to the plant cost account
D) Discount received of $600 has been debited to the discount allowed accountThe correct answer is D.
A discount received should debit Payables and credit the Discount received account. To fix, one should credit the incorrecly debited Discount allowed with $600 and credit the Discount received account instead. This would increase the credit side of the TB by $1,200.
How does the suspense account come in play here (if indeed it does)?I have another question regarding the suspense account.
It says (p.279, Kaplan F3) that ommitting an opening accrual requires an entry to the suspense account to correct the error.
Could someone please provide an example of this?You have asked this in the Ask the Tutor Forum – I am the tutor so I don’t know who you mean by ‘someone’ !!!
If an opening balance has been missed out, then the closing balance on the account will be wrong as well.
Therefore the trial balance will not balance, and therefore it will affect the suspense account.Thank you, John, it really is too simple. I wasn’t aware you were the only tutor on the F3 board so please excuse the misaddressment. 🙂
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