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A trial balance extracted from would require a sole trader’s record failed to agree, and a suspense account was opened up for the difference.
Which of the following errors would require an entry in the suspense account in correcting them?1. Cash received from sale of non-current asset was correctly entered in the cash book but was debited to the disposal account
2. The balance on the rent account was omitted from the trial balanceI am not understanding why number two would need a suspense account. I understand the first one because there would be two debits but I am not clear on the second. Could you explain please? Thank you
A suspense account is used when the trial balance does not balance.
If one of the balances is not listed on the trial balance, then the trial balance will not balance and therefore a suspense account will be needed.
Please do watch my free lectures on suspense accounts. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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