ACCA FA · Chapter 10 · Question 4 of 12
A suspense account was opened when a trial balance failed to agree. The following errors were then found: 1. A gas bill of $560 was correctly recorded in the cash book but debited to the gas account as $650. 2. Cash received from a customer of $1,300 was recorded in the cash book but not posted to the receivables control account. 3. Discount received of $220 was debited to the discount received account. After correcting these errors the suspense account has a nil balance. What was the original balance on the suspense account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $1,830 credit
Explanation
Error 1: the gas debit is $90 too high, so the correction is Dr Suspense $90, Cr Gas $90. Error 2: only the debit was made, so Dr Suspense $1,300, Cr Receivables $1,300. Error 3: a credit of $220 was posted as a debit, so correcting it requires Cr Discount received $440, Dr Suspense $440. Total debits to suspense = $90 + $1,300 + $440 = $1,830, so the original balance was a credit of $1,830. Correcting error 3 with only $220 gives $1,610.
More Trial balance, errors, control accounts and bank reconciliations MCQs
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