Suspense Accounts and Errors

Which of the following errors would be disclosed by a trial balance ?

• Expenses being debited to the sales account.

• A credit sale of £300 inadvertently entered in the Sales Journal as £30.

• Failure to record a cash purchase.

• None of the above.

If a trial balance does not balance, which of the following accounts should be opened ?

• A suspense account.

• A control account.

• A provision account.

• A liability account.

Which of the following should be entered in a suspense account ?

• Miscellaneous expenses.

• Any difference between the debit and credit totals of the trial balance which cannot be immediately located pending further investigation.

• Bad debts recovered.

• None of the above.

If there is a material (significant) debit balance on a suspense account . . .

• it should be included as an asset in the balance sheet.

• it should be included as an expense in the profit and loss account.

• it should be included as a liability in the balance sheet.

• the underlying error(s) should be located and corrected before preparing financial statements.

Bank charges should initially be recorded . . .

• by debiting the bank charges account and crediting the bank account.

• by debiting the bank account and crediting the bank charges account.

• in the Cash Book (or Cheque Payments Book).

• by debiting the suspense account and crediting the bank account.