PRC-1 · Chapter 8 · Question 14 of 100
Rent expense of Rs. 200 was paid and correctly recorded in the cash book, but it was credited to the rent expense account. What will be the balance of the Suspense account before correction?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 400 Debit
Explanation
The payment was credited to the cash book correctly, but also credited to rent expense instead of being debited. This results in the credit side being heavier by 400 (missing 200 debit, extra 200 credit). The suspense account will have a balancing debit of 400.
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