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- June 10, 2012 at 9:31 pm #53315
The totals on the trial balance of Blue were
Debit $23,200
Credit $24,100
and a suspense account was opened for the difference
The following were found:
1. a receipt from a customer of $2300 had been entered correct in the cash account, but had been posted to the receivables account as $3200.2. a payment of $8000 for a car had been correctly entered in the cash account, but had been posted to the credit of the motor repairs account.
What balance will remain on the suspense account after correction of these errors.
June 11, 2012 at 7:34 am #99938difference between cr 24100 and dr 23200 is 900. debit is lower , so to balance, u debit suspense a/c by 900. so initial suspense a/c balance is 900.
1. correct entry should be
dr cash 2300
cr receivables 2300entry recorded was
dr cash 2300
cr receivables 3200
(here the cr is more than debit by 900, hence we put debit suspense as 900 so both sides r equal that is
dr cash 2300
dr suspense 900
cr receivables 3200Now to remove the suspense balance we pass the entry
dr receivables 900 (now the receivables has got the correct balance ie cr 3200 – dr 900 = cr 2300)
cr suspense 900 ( to remove the suspense balance)2. correct enty should be
dr car 8000
cr cash 8000entry recorded was
cr cash 8000
cr motor repair 8000
now there is only cr side for this equation which is 16000 and no debit side , so we put 16000 dr on the suspense a/cdr suspense 16000
cr cash 8000
cr motor repair 8000to remove suspense balance the entry wud b
dr car 8000
dr repair 8000(this offsets the earlier cr balance on repair a/c)
cr suspense 16000(this offsets the dr balance on suspense a/c)so suspense a/c balance will be dr 900 (opening balance)
cr 900 (from error 1)
cr 16000( from error 2)so final balance on suspense a/c will be cr 16000. correct me if am wrong.
August 25, 2012 at 5:59 am #99939Anonymous
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Thanks u so much
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