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Please help me with this questions. I feel confused. Thanks:)
Marlon created a suspense account with a debit balance of $1250 in order to balance his trial balance.
He subsequently investigated and found the following errors:
1) the closing balance of the purchase ledger control account at the current year end has been undercast by $160
2) cash received of $450 from customers has only been entered into the cash account
3) The purchase returns day book has been overcast by $300What is the remaining debit balance on the suspense account after these errors have been corrected?
1. The control account (i.e. payables) needs increasing by 160. So credit the control and debit suspense with 160.
2. 450 has not been entered on receivables account, so debit receivables and credit suspense with 450.
3. This does not affect the suspense account because although the total in the day book is wrong, the same total will have been entered in both the payables and the returns accounts and so the trial balance will still have balanced.
Have you watched the free lectures on suspense accounts and on books of prime entry? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
thank you so much for your detailed explanation 🙂 I will definitely go and watch the video
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