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M Co’s trial balance does not agree and therefore a suspense account with a debit balance of $3,000
has been opened.
Which of the following errors could explain this difference?
A A receipt of $3,000 from a credit customer has been credited to the payables control account
instead of the receivables control account.
B The interest received account of $1,500 has been omitted from the trial balance.
C Equipment repairs of $3,000 have been incorrectly capitalised as part of plant and equipment.
D A $1,500 bank balance has been shown in the trial balance as an overdraft of $1,500.
this answer is D but i don’t understand why answer is DA is wrong because although the should have credited receivables, it would still have been a credit and so the TB would still have balanced.
B is wrong because omitting the balance would mean that the credit side of the TB would be too low. However the suspense account has a debit balance.
C is wrong because even though it should not have been capitalised it would still have been a bit and so the TB would still have balanced.
D is correct because it is showing in the TB as a credit balance when it should have been a debit balance. So the credits are 1500 too big and the credits are 1500 too small. That means that the credits are 3000 more than the debits, which is why there is a debit balance of 3000 on the suspense account.
On the MR. Moffat’s reply:
“So the credits are 1500 too big and the credits are 1500 too small. That means that the credits are 3000 more than the debits, which is why there is a debit balance of 3000 on the suspense account.”-> It is “So the Credits are 1500 toobig and DEBITS are 1500 too small…” right
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