ACCA Applied Knowledge · Financial Accounting · Suspense accounts
A trial balance shows total debits of $184,600 and total credits of $183,900. The difference is being investigated. It is found that a payment of $350 to a supplier was debited to the payables account correctly but no credit entry was made in the cash book. What is the remaining difference after correcting this error, and which side is it on?
After posting the missing $350 credit to cash, an excess of debits of $350 remains. The original difference was $700 with debits higher, and correcting the one-sided entry adds $350 to credits, leaving half the difference unexplained.
- A$350 excess of credits
- B$1,050 excess of debits
- C$350 excess of debitsCorrect
- D$1,050 excess of credits
Explanation
Initially debits exceed credits by $700. The omitted credit of $350 to cash would add $350 to credits, reducing the excess of debits to $350. A candidate who thinks the omission affects the debit side would wrongly get $1,050.
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