FA [Suspense Account]

When Q’s trial balance failed to agree, a suspense account was opened for the difference. The trial balance totals were:

Debit $864,390

Credit $860,930

The company does not have control accounts for its receivables and payables ledgers.

The following errors were found:

1 In recording an issue of shares at par, cash received of $333,000 was credited to the ordinary share capital account as $330,000.

2 Cash $2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset account.

3 The petty cash book balance $500 had been omitted from the trial balance.

4 A cheque for $78,400 paid for the purchase of a motor car was debited to the motor vehicles account as $87,400.

5 A contra between the receivables ledger and the payables ledger for $1,200 which should have been credited in the receivables ledger and debited in the payables ledger was actually debited in the receivables ledger and credited in the payables ledger.

Q.1 Which of these errors will require an entry to the suspense account to correct them?

• All five items

• 3 and 5 only

• 2, 4 and 5 only

• 1, 2, 3 and 4 only

When Q’s trial balance failed to agree, a suspense account was opened for the difference. The trial balance totals were:

Debit $864,390

Credit $860,930

The company does not have control accounts for its receivables and payables ledgers.

The following errors were found:

1 In recording an issue of shares at par, cash received of $333,000 was credited to the ordinary share capital account as $330,000.

2 Cash $2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset account.

3 The petty cash book balance $500 had been omitted from the trial balance.

4 A cheque for $78,400 paid for the purchase of a motor car was debited to the motor vehicles account as $87,400.

5 A contra between the receivables ledger and the payables ledger for $1,200 which should have been credited in the receivables ledger and debited in the payables ledger was actually debited in the receivables ledger and credited in the payables ledger.

Q.2 What will the balance on the suspense account be after making the necessary entries to correct the errors affecting the suspense account?

• $2,440 Debit

• $15,560 Credit

• $13,640 Debit

• $3,440 Debit

A company’s trial balance totals were:

Debit $387,642

Credit $379,511

A suspense account was opened for the difference.

Which one of the following errors would have the effect of reducing the difference when corrected?

• The petty cash balance of $500 has been omitted from the trial balance.

• $4,000 received for rent of part of the office has been correctly recorded in the cash book and debited to rent account.

• $3,000 paid for repairs to plant has been debited to the plant asset account.

• An invoice for Mr A Smith for $400 has been posted to the account of Mrs B Smith in error.

A trial balance extracted from a sole trader’s records failed to agree, and a suspense account was opened for the difference.

Which of the following errors would require an entry in the suspense account in correcting them?

1 Discount allowed was mistakenly debited to discount received account.

2 Cash received from the sale of a non-current asset was correctly entered in the cash book but was debited to the disposal account.

3 The balance on the rent account was omitted from the trial balance.

4 Goods taken from inventory by the proprietor had been recorded by crediting drawings account and debiting purchases account.

• All four items

• 2 and 3 only

• 2 and 4 only

• 1 and 3 only

A suspense account was opened when a trial balance failed to agree. The following errors were later discovered.

•A gas bill of $420 had been recorded in the gas account as $240.

•A discount of $50 given to a customer had been credited to discounts received.

•Interest received of $70 had been entered in the bank account only.

What was the original balance on the suspense account?

• Debit $210

• Credit $210

• Debit $160

• Credit $160

A company’s trial balance failed to agree, the out of balance difference of $25,000 being posted to a suspense account.

Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of machinery for $25,000, by cheque, failing to post to the plant and machinery account.

Which of the following journal entries would correct the error?

• Plant and machinery Debit $ 25,000 Bank current account Credit $ 25,000

• Suspense account Debit $ 25,000 Plant and machinery Credit $ 25,000

• Plant and machinery Debit $ 25,000 Suspense account Credit $ 25,000

• Bank current account Debit $ 25,000 Suspense account Credit $ 25,000

The trial balance of Z failed to agree, the totals being: debit $836,200 credit $819,700

A suspense account was opened for the amount of the difference and the following errors were found and corrected:

1 The totals of the cash discount columns in the cash book had not been posted to the discount accounts. The figures were discount allowed $3,900 and discount received $5,100.

2 A cheque for $19,000 received from a customer was correctly entered in the cash book but was posted to the control account as $9,100.

What will be the remaining balance on the suspense be after the correction of these errors?

• $25,300 credit

• $7,700 credit

• $27,700 debit

• $5,400 credit

The trial balance of C, a limited liability company, did not agree, and a suspense account was opened for the difference. Checking in the bookkeeping system revealed a number of errors.

1 $4,600 paid for motor van repairs was correctly treated in the cash book but was credited to motor vehicles asset account.

2 $360 received from B, a customer, was credited in error to the account of BB.

3 $9,500 paid for rent was debited to the rent account as $5,900.

4 The total of the discount allowed column in the cash book had been debited in error to the discounts received account.

5 No entries have been made to record a cash sale of $100.

Which of the errors above would require an entry to the suspense account as part of the process of correcting them?

• 3 and 4

• 1 and 3

• 2 and 5

• 2 and 3

The suspense account shows a debit balance of $100. What could this balance be due to?

• Entering $50 received from A Turner on the debit side of A Turner's account

• Entering $50 received from A Turner on the credit side of A Turner's account

• Under casting the sales day book by $100

• Under casting the purchases account by $100

A suspense account shows a credit balance of $130. Which of the following could be due to?

• Omitting a sale of $130 from the sales ledger

• Recording a purchase of $130 twice in the purchases account

• Failing to write off a bad debt of $130

• Recording an electricity bill paid of $65 by debiting the bank account and crediting the electricity account