ExpertHard2 marksMultiple Choice
ACCA · Question 21 · Preparing a trial balance
A trial balance fails to agree. The debit column totals $150,000 and the credit column totals $152,000. A suspense account is opened. It is later discovered that a cash payment of $1,000 for rent was credited to the cash book but no other entry was made. What is the journal entry to correct this error and clear the suspense account?
A trial balance fails to agree. The debit column totals $150,000 and the credit column totals $152,000. A suspense account is opened. It is later discovered that a cash payment of $1,000 for rent was credited to the cash book but no other entry was made. What is the journal entry to correct this error and clear the suspense account?
Answer options:
A.
Dr Rent $1,000, Cr Cash $1,000
B.
Dr Suspense $1,000, Cr Rent $1,000
C.
Dr Rent $1,000, Cr Suspense $1,000
D.
Dr Rent $2,000, Cr Suspense $2,000
How to approach this question
Determine the opening balance of the suspense account. Then determine the missing side of the double entry.
Full Answer
D.Dr Rent $2,000, Cr Suspense $2,000✓ Correct
The trial balance debits are $150,000 and credits are $152,000. A suspense account is opened with a debit balance of $2,000. The error is a missing debit entry for rent of $2,000. The correcting journal is Debit Rent $2,000, Credit Suspense $2,000.
Common mistakes
Crediting cash again, or debiting suspense instead of crediting it.
Practice the full ACCA FA — Financial Accounting Practice Exam 2
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