ExpertHard2 marksMultiple Choice
ACCA · Question 17 · Preparing a trial balance
Section A
A trial balance failed to agree, and a suspense account was opened with a debit balance of $800. The following errors were subsequently discovered:
- A cash payment of $300 for stationery was credited to the cash book but no other entry was made.
- A sales invoice for $500 was completely omitted from the books.
What will be the balance on the suspense account after these errors are corrected?
Section A
A trial balance failed to agree, and a suspense account was opened with a debit balance of $800. The following errors were subsequently discovered:
- A cash payment of $300 for stationery was credited to the cash book but no other entry was made.
- A sales invoice for $500 was completely omitted from the books.
What will be the balance on the suspense account after these errors are corrected?
Answer options:
A.
Nil
B.
$500 debit
C.
$1,100 debit
D.
$800 debit
How to approach this question
Determine which errors cause an imbalance in the trial balance. Complete omissions do not affect the suspense account. Single-sided entries do. Post the correction to the suspense account to find the new balance.
Full Answer
B.$500 debit✓ Correct
Error 1: A credit to cash with no debit means debits are short by $300. To correct: Dr Stationery $300, Cr Suspense $300. Error 2: Complete omission does not affect the trial balance, so no suspense entry is needed. Suspense account: Opening balance $800 Dr. Correction 1: $300 Cr. Closing balance = $500 Dr.
Common mistakes
Trying to correct complete omissions through the suspense account.
Practice the full ACCA FA — Financial Accounting Practice Exam 1
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