Errors & the suspense account

What is the first step in correcting errors?

• Erase the error

• Use correcting fluid

• Correct the error in the ledger accounts

• Correct the error in the cashbook

What is a suspense account used for?

• To calculate net profit

• To make totals of a Trial Balance agree

• To track cash flow

• To permanently record transactions

What does 'casting' mean in accounting?

• To erase an error

• To add up figures

• To balance the trial balance

• To write a journal entry

What should be done with the suspense account after correcting all errors?

• Close it

• Ignore it

• Transfer it to another account

• Increase its balance

What is 'overcasting'?

• Adding figures correctly

• Adding figures to less than they should be

• Not adding figures at all

• Adding figures to more than they should be

If a Trial Balance has a credit Balance for the suspense account, where should it be included in the balance sheet?

• Equity

• Long term liability

• Current assets

• Current liabilities

What is an error of commission?

• Omitting a transaction

• Correct amount in the person wrong account

• Wrong amount in the correct account

• Correct amount in the wrong type account

What must accompany a journal entry when correcting an error?

• A narrative explaining the error

• A signature

• A new page

• A different pen color

What is the correct entry to correct an undercast in the rent receivable account? (choose both sides of the entry)

• Credit the rent expense account

• Debit the rent receivable account

• Credit the suspense account

• Debit the suspense account

What is a complete reversal of entries?

• Correct amounts in the wrong person account

• Correct amounts on the wrong side in the accounts

• No entries made at all

• Incorrect amounts in the correct accounts