ACCA Applied Knowledge · Financial Accounting · Correction of errors
A trial balance totals debits of $412,300 and credits of $409,800. The difference is posted to a suspense account. Which statement about the suspense account is correct?
The suspense account has a credit balance of $2,500. Debits exceeded credits by that amount, so a credit entry in suspense is needed to make the trial balance agree until the underlying errors are found and corrected.
- AIt has a credit balance of $2,500Correct
- BIt has a debit balance of $2,500
- CIt has a credit balance of $822,100
- DIt has a debit balance of $822,100
Explanation
Debits exceed credits by $2,500 (412,300 - 409,800). To make the trial balance agree, a credit of $2,500 is placed in suspense. A debit balance would make the imbalance worse.
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