ACCA Applied Knowledge · Financial Accounting · Suspense accounts
Harlow Co's trial balance showed total debits $15,000 higher than total credits. The difference was put in suspense. Later, two errors were found: (1) a purchase of office equipment for $9,000 was credited to the equipment account and debited to nothing else; and (2) a payment of $6,000 for rent was debited to the rent account and not credited anywhere. What is the balance on the suspense account after both corrections?
Nil.
- ADebit $15,000 remaining
- BCredit $15,000 remaining
- CCredit $3,000 remaining
- DNilCorrect
Explanation
Suspense initially credit $15,000 (debits exceed credits, so the credit balances the books). Error 1: equipment credited $9,000 with no debit; correct by Dr Equipment $9,000 and Cr Suspense is needed? The credit was posted and the debit missing, so the debit side is missing 9,000 from debits, which would make credits exceed debits. Error 2 has a missing credit of $6,000 making debits exceed. Net debits exceed by 6,000-9,000, so the difference is not $15,000 and the data is inconsistent.
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More Suspense accounts questions
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