The trial balance of Z failed to agree, the totals being:
debit $209,050
credit $204,925
A suspense account was opened for the amount of the difference and the following errors were found and corrected:
- The totals of the cash discount columns in the cash book had not been posted to the discount accounts. The figures were discount allowed $975 and discount received $1,275.
- A cheque for $4,750 received from a customer was correctly entered in the cash book but was posted to the control account as $2,275.
What will be the remaining balance on the suspense be after the correction of these errors?
1/
Suspense Account
Dr. Suspense Account…. ……………….975
Cr. AR………………………………………………………..…975
Dr. AP…………………………………………. 1,275
Cr. Suspense Account……………………………….1,275
Adjusting Entry
Dr. discount allowed……………………975
Cr. Suspense Account……………………………….. 975
Dr. Suspense Account…………………1,275
Cr. Discount received………………………………1,275
2/
Suspense Account
Dr. Cash…………………………………….. 4,750
Cr. AR…………………………………………………………. 2,275
Cr. Suspense Account…………………………………2,475
Adjusting Entry
Dr. Suspense Account………………2,475
Cr. AR………………………………………………………….. 2,475
Answer
| Suspense account | $ | |
| Opening balance(credit $204,925-debit $209,050) | 4,125 | credit |
| Discount allowed | 975 | credit |
| Discount received) | (1,275) | debit |
| Transposition of cash received | (2,475) | debit |
| Remaining balance on the suspense | 1,350 | credit |