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Suspense account.

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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August 4, 2016 at 3:04 am #331271
Abror
Member
- Topics: 75
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Hi Mr John…Can you answer…Thank you
A company’s trial balance failed to agree, out of balance difference of 25000 being posted to a suspense account.
Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of machinery for 25000, by cheque, failing to post to the plant and machinery account.
Which of the following journal entries would correct the error?
B. Suspense account 25000 (debit) and Plant and machinery 25000 Cr
C. The other way around…
August 4, 2016 at 6:10 am #331295
John Moffat
Keymaster
- Topics: 57
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Is there not an answer in the same book in which you found the question?
The answer is C – if they have not posted to the P&M account then they should do, and of course it should be debited because it is an asset.
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