ICAEW AF · Chapter 7 · Question 5 of 12
Cash sales of £5,630 were correctly entered in the cash book but credited to the revenue account as £5,360. What journal corrects this error?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Suspense £270, Credit Revenue £270
Explanation
Revenue was credited with £5,360 instead of £5,630, so it is understated by £270. Because the debit to cash was correct, the trial balance would not have agreed and the difference would have gone to suspense. The correction credits revenue with £270 and debits suspense with £270.
More Errors, suspense accounts and correcting journals MCQs
- Q7A sole trader's draft profit for the year is £64,800. The following matters have not yet been reflected: 1. Closing inventory was…
- Q8Which of the following errors would require an entry to the suspense account when it is corrected?
- Q9A credit sales invoice for £1,240 was entered in the sales day book as £1,420 and posted from there. What is the effect of this error and…
- Q10An invoice for goods bought on credit for £950 was not recorded in the books at all. Which journal corrects this error?
- Q11A sole trader's personal home insurance of £1,500 was paid from the business bank account and debited to the business insurance expense…