ExpertACCA · Question 19 · Preparing a Trial Balance
A logistics company extracts a trial balance where total debits are $450,000 and total credits are $446,000. A suspense account is opened for the difference. It is later discovered that a cash payment of $2,000 for motor expenses was correctly entered in the cash book but completely omitted from the motor expenses account. What is the journal entry to correct this error and what is the remaining balance on the suspense account?
A logistics company extracts a trial balance where total debits are $450,000 and total credits are $446,000. A suspense account is opened for the difference. It is later discovered that a cash payment of $2,000 for motor expenses was correctly entered in the cash book but completely omitted from the motor expenses account. What is the journal entry to correct this error and what is the remaining balance on the suspense account?
Answer options:
Debit Motor Expenses $2,000, Credit Suspense $2,000. Remaining suspense balance is Nil.
Debit Motor Expenses $2,000, Credit Suspense $2,000. Remaining suspense balance is $2,000 Credit.
Debit Motor Expenses $2,000, Credit Suspense $2,000. Remaining suspense balance is $6,000 Credit.
Debit Suspense $2,000, Credit Motor Expenses $2,000. Remaining suspense balance is $2,000 Credit.
How to approach this question
Full Answer
Common mistakes
Practice the full ACCA FA — Financial Accounting Practice Exam 4
65 questions · hints · full answers · grading