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CMA Foundation · Fundamentals of Financial and Cost Accounting · Trial Balance

In the books of Sharma Stores, the trial balance was short on the credit side, and Rs 1,800 was put to the credit of Suspense Account. The following errors were later found: (i) Rs 1,200 paid for rent was debited to Rent account as Rs 2,100; (ii) the Purchases Book was over-cast by Rs 300. After rectifying both errors, what balance remains in the Suspense Account?

The Suspense Account is left with a credit balance of Rs 600. Rent was overdebited by Rs 900 and purchases over-cast by Rs 300, so suspense is debited with Rs 1,200 in total. Against its opening credit of Rs 1,800, a credit of Rs 600 remains.

  1. ACredit Rs 1,800 remains
  2. BCredit Rs 600
  3. CNilCorrect
  4. DDebit Rs 600

Explanation

Rent was debited Rs 900 too much (2,100 − 1,200) and the cash credit was correct, so rent is credited Rs 900 and suspense debited Rs 900. Purchases over-cast by Rs 300 means purchases are overdebited, so credit Purchases Rs 300 and debit Suspense Rs 300. That gives debits to suspense of Rs 1,200 against the opening credit of Rs 1,800, leaving Rs 600 credit. So the answer is Credit Rs 600.

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