Question 1

Section A

HeavyForge Manufacturing extracted a trial balance that failed to agree. The debit column exceeded the credit column by $450. A suspense account was opened. It was later discovered that a cash sale of $890 was correctly entered in the cash book, but was recorded as $980 on the debit side of the sales account.

What will be the balance on the suspense account after correcting this single error? (Enter the number only. If the balance is zero, enter 0).

Accepted Answer

Determine the initial suspense balance. Analyze the error: Cash sale of $890. Correct entry: Dr Cash 890, Cr Sales 890. Actual entry: Dr Cash 890, Dr Sales 980. Calculate the difference this caused in the trial balance and adjust the suspense account.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Failing to add the 980 and 890 together to fix the directional error, or getting the initial suspense balance direction wrong.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FA — Financial Accounting Practice Exam 5

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