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Suspense account

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Suspense account

  • This topic has 3 replies, 3 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 8, 2018 at 8:30 pm #484234
    suleymanabuzerli
    Member
    • Topics: 84
    • Replies: 32
    • ☆☆

    Hello,Sir
    cash received from sale of non current asset (1000$) in cash book correctly recorded but debited to disposal

    which is correct entry with suspense account

    CR disposal 1000
    CR non-current asset 1000
    DR suspense account 2000

    Or

    CR disposal 2000
    DR suspense 2000

    ???

    November 9, 2018 at 6:47 am #484256
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    As you will know from my free lectures on non-current assets, they should have credited the disposal account and not debited it.

    Therefore it is your second entry that is the right one for correcting the mistake.

    November 23, 2018 at 11:30 am #485605
    eurekaly
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    Qn: 1)The book keeper made the following errors:
    -Discount allowed 3840 credited to Discount Received account
    -Discount received 2960 was debited to discount allowed account

    What is to be recorded in the suspense account?

    2) The book keeper made the following error:
    A discount allowed of 78 was debited to the discount received account

    Should you open a suspense account?

    My qn is, why do I have to open a suspense account for qn 1 whereas for qn 2, I don’t have to open a suspense account?.

    Thank you

    November 23, 2018 at 2:45 pm #485635
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    In question 1, the discount allowed has been credited to an account whereas it should have been debited (to discounts allowed). Therefore they will have two credits (they will have credited receivables), therefore the trial balance will not balance and therefore we need a suspense account. The same logic applies to the discount received.

    In question 2, although they have debited the wrong account, they were correct to have a debit (it should have been debited to discounts allowed). However because there is a debit entry, the trial balance will still balance and there is therefore no need for a suspense account.

    I do suggest that you watch my free lectures on suspense accounts.

    The lectures are a complete free course and cover everything needed to be able to pass the exam well.

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