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ACCA Applied Knowledge · Financial Accounting · Trial balance

A trial balance failed to agree, and the difference was placed in a suspense account. Which of the following errors would be the cause of a debit balance on the suspense account?

A one-sided credit entry, such as cash received credited to the customer account with no debit, makes total credits exceed debits. The suspense account must then be debited to balance the trial balance, so this error produces a debit balance on suspense.

  1. AA sale of $500 recorded by debiting receivables $500 and crediting sales $50
  2. BA purchase of inventory of $300 debited to purchases only, with no credit entry made
  3. CCash received from a customer credited to the receivable account only, with no debit entry madeCorrect
  4. DA payment of rent debited to the rent account and credited to the bank account twice

Explanation

If credits exceed debits in the ledger, the trial balance debit side is short, so suspense must be debited. A credit to receivables with no debit leaves credits higher by that amount, giving a debit suspense. Option A creates excess debits (credit suspense), as does B. Option D is balanced (both sides doubled).

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