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Hello,
a suspense account is created if there has been a one-sided entry or both sides of a journal have been posted to the same side of the ledger. I have problems determining whether there has been a one-sided entry, e.g. rent received of 240 had been credited to the rent payable account. Why is the double entry maintained? What is the debit entry?
Thanks!There are lots of reasons why a suspense account may be used – not just the two reasons you mentioned.
With rent received, the entry should have been Dr Cash; Cr Rent received.
What they have done is Dr Cash; Cr Rent payable.
Therefore to correct it, we need to Dr Rent Payable; Cr Rent received.
There is no suspense account, because the Dr equalled the Cr (even though it was posted to the wrong account).
Have you watched my free lectures on suspense accounts? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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