Question 1

Section A

A company's trial balance includes a suspense account with a credit balance of $800. The following errors are discovered:
1. A payment of $300 for electricity was debited to the electricity account as $30.
2. A sales invoice for $530 was completely omitted from the books.
What will be the balance on the suspense account after correcting these errors?

Accepted Answer

1. Note initial suspense balance: $800 Credit. 2. Analyze Error 1: Electricity (Debit) was recorded as $30 instead of $300. Debits are short by $270. Correction: Debit Electricity $270, Credit Suspense $270. 3. Analyze Error 2: Complete omission has no effect on suspense. 4. Final Suspense = $800 Cr + $270 Cr = $1,070 Cr.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming the errors will perfectly clear the suspense account to Nil, or adjusting for the omitted sales invoice.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FA — Financial Accounting Practice Exam 6

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