PRC-1 · Chapter 8 · Question 42 of 100
Which of the following correctly describes the nature of a Suspense Account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It is a temporary account used to force a trial balance to agree until errors are found and corrected
Explanation
A suspense account serves as a temporary ledger account meant strictly to hold imbalances in the trial balance until the source errors are investigated and rectified via journal entries.
More Correction of Errors MCQs
- Q44A credit sale of Rs. 600 was completely omitted from the books. How does this affect the trial balance?
- Q45Rent received of Rs. 1,400 was correctly entered in the cash book but debited to the Rent Received account in the general ledger. What is…
- Q46To correct the error in the previous question (Rent received of Rs. 1,400 debited instead of credited to Rent Received), what journal…
- Q47Goods costing Rs. 2,000 were taken by the owner for personal use but no entry was made. What is the correcting journal entry?
- Q48A purchase of goods for Rs. 3,500 on credit was recorded in the purchases day book as Rs. 5,300 and posted to the ledger accordingly. What…