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Trial balance/suspense

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Trial balance/suspense

  • This topic has 4 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • August 19, 2014 at 9:28 am #191427
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    a line from a question:

    “the balance of 21520 on the rent receivable account has been omitted from the trial balance”

    rent receivable is an asset, thus the balance has to be Dr.

    therefore we need 21520 dr. thus the correction entry will be:

    Dr Rent Receivable 21520
    Cr Suspense 21520

    ——————————————–

    however, the text says

    Dr suspense
    Cr Rent rec

    ——————————-

    why??

    August 19, 2014 at 10:13 am #191435
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    No – rent receivable is income, and is therefore a credit.

    (This is a problem with the English that you are going to have to accept, I’m afraid. Usually the word ‘receivable’ does mean that we are owed money, so an asset, so a debit. However the phrase ‘rent receivable’ normally actually means ‘rental income’. I am sorry about that (although its not my fault 🙂 ). The same applies if you see the phrase ‘interest receivable’ – it really means ‘interest income’.)

    August 19, 2014 at 11:43 am #191458
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    ah….yes of course its not ur fault….:)

    thank u sir!

    August 19, 2014 at 11:53 am #191489
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    related question:

    “rent payable” is still a liability account or is it rent expense?

    August 19, 2014 at 11:56 am #191491
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Oh dear 🙁

    The problem is that it could be either. Most likely it will mean rent expense but it really depends on the wording of the rest of the question.

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