Skip to content

ACCA Applied Knowledge · Financial Accounting · Suspense accounts

A trial balance fails to agree, with total debits exceeding total credits by $900. Which treatment is correct for the difference at the trial balance date?

Credit $900 to a suspense account. Debits exceed credits, so a credit balancing entry is needed to make the trial balance agree until the underlying errors are found and corrected through journals.

  1. ADebit $900 to a suspense account
  2. BCredit $900 to a suspense accountCorrect
  3. CWrite the $900 off to profit or loss as an expense
  4. DReduce the closing inventory figure by $900

Explanation

Debits exceed credits by $900, so a credit of $900 is needed to make the trial balance agree. The credit goes to a suspense account. A debit would double the difference to $1,800, and the difference should not be buried in profit or loss or inventory.

Did you get it right without looking?

One question tells you little. A timed set on Suspense accounts shows your real accuracy, how long you take and where you lose marks.

Practise Suspense accountsFree diagnostic mock

More Suspense accounts questions