• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Suspense Account

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

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • May 21, 2021 at 9:50 pm #621371
    maximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    John received a cheque for $950 from his insurance company in settlement of a claim for repairs to a van. The bookkeeper recorded the cheque correctly in the cash day book, but did not complete the double entry. The total of the trial balance did not agree and a suspense account was opened to record the difference.
    What journal entry is required to eliminate the balance on the suspense account?

    A) Debit Suspense Credit Insurance
    Being correction of an error of omission

    B) Debit Insurance Credit Suspense
    Being correction of an error omission

    C) Debit Suspense Credit Van repairs
    Being correction of an error of omission

    D) Debit Van repairs Credit Suspense
    Being correction of an error of omission

    Why answer is “C” not “A”?
    We Debit Insurance Claim and Credit Expense, if we have insurance of that expense.
    Like if loss of inventory but insurance claimed so Dr Insurance Claim and Cr P/L (COGS).
    So if we get insurance back so it should be credited and Suspense Account would be debited.
    Please help me with this.

    May 22, 2021 at 8:16 am #621393
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    It was a claim to pay for repairs and therefore the money received from the insurance reduces the total repairs expense in the SOPL.

    Therefore the entry should have been debit cash, credit repairs.

    They have debited cash but have not credited repairs. Therefore the correcting entry is to credit repairs and debit suspense account.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023
  • Jarzin on The Finance Function in the Digital Age – CIMA E1
  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in