Suspense Accounts (Y7C15)

	The following information is relevant for question 1 and 2.
	When Q's trial balance failed to agree, a suspense account was opened for the difference. The trial balance totals were:
	Debit Credit			$864,390 $860,930
	The company does not have control accounts for its receivables and payables ledgers. The following errors were found:
	1	In recording an issue of shares at par, cash received of $333,000 was credited to the ordinary share capital account as $330,000.
	2	Cash $2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset account.
	3	The petty cash book balance $500 had been omitted from the trial balance.
	4	A cheque for $78,400 paid for the purchase of a motor car was debited to the motor vehicles account as $87,400.
	5	A contra between the receivables ledger and the payables ledger for $1,200 which should have been credited in the receivables ledger and debited in the payables ledger was actually debited in the receivables ledger and credited in the payables ledger.
1	Which of these errors will require an entry to the suspense account to correct them?
	A	All five items
	B	3 and 5 only
	C	2, 4 and 5 only
	D	1, 2, 3 and 4 only
2	What will the balance on the suspense account be after making the necessary entries to correct the errors affecting the suspense account?
	A	$2,440 Debit
	B	$15,560 Credit
	C	$13,640 Debit
	D	$3,440 Debit
3	A company's trial balance totals were:
	Debit Credit			$387,642 $379,511
	A suspense account was opened for the difference. Which one of the following errors would have the effect of reducing the difference when corrected?
	A	The petty cash balance of $500 has been omitted from the trial balance.
	B	$4,000 received for rent of part of the office has been correctly recorded in the cash book and debited to rent account.
	C	$3,000 paid for repairs to plant has been debited to the plant asset account.
	D	An invoice for Mr A Smith for $400 has been posted to the account of Mrs B Smith in error.
4	A trial balance extracted from a sole trader's records failed to agree, and a suspense account was opened for the difference. Which of the following errors would require an entry in the suspense account in correcting them?
	1	Discount allowed was mistakenly debited to discount received account.
	2	Cash received from the sale of a non-current asset was correctly entered in the cash book but was debited to the disposal account.
	3	The balance on the rent account was omitted from the trial balance.
	4	Goods taken from inventory by the proprietor had been recorded by crediting drawings account and debiting purchases account.
	A	All four items
	B	2 and 3 only
	C	2 and 4 only
	D	1 and 3 only
5	A suspense account was opened when a trial balance failed to agree. The following errors were later discovered.
	-	A gas bill of $420 had been recorded in the gas account as $240.
	-	A discount of $50 given to a customer had been credited to discounts received.
	-	Interest received of $70 had been entered in the bank account only.
	What was the original balance on the suspense account?
	A	Debit $21
	B	Credit $210
	C	Debit $160
	D	Credit $160
6	A company's trial balance failed to agree, the out of balance difference of $25,000 being posted to a suspense account. Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of machinery for $25,000, by cheque, failing to post to the plant and machinery account. Which of the following journal entries would correct the error?
			Debit $		Credit $
	A	Plant and machinery Bank current account	25,000		25,000
	B	Suspense account Plant and machinery	25,000		25,000
	C	Plant and machinery Suspense account	25,000		25,000
	D	Bank current account Suspense account	25,000		25,000
7	The trial balance of Z failed to agree, the totals being:					Debit $836,200 Credit $819,700
	A suspense account was opened for the amount of the difference and the following errors were found and corrected:
	1	The totals of the cash discount columns in the cash book had not been posted to the discount accounts. The figures were discount allowed $3,900 and discount received $5,100.
	2	A cheque for $19,000 received from a customer was correctly entered in the cash book but was posted to the control account as $9,100.
	What will be the remaining balance on the suspense be after the correction of these errors?
	A	$25,300 credit
	B	$7,700 credit
	C	$27,700 debit
	D	$5,400 credit
8	The trial balance of C, a limited liability company, did not agree, and a suspense account was opened for the difference. Checking in the bookkeeping system revealed a number of errors.
	1	$4,600 paid for motor van repairs was correctly treated in the cash book but was credited to motor vehicles asset account.
	2	$360 received from B, a customer, was credited in error to the account of BB.
	3	$9,500 paid for rent was debited to the rent account as $5,900.
	4	The total of the discount allowed column in the cash book had been debited in error to the discounts received account.
	5	No entries have been made to record a cash sale of $100.
	Which of the errors above would require an entry to the suspense account as part of the process of correcting them?
	A	3 and 4
	B	1 and 3
	C	2 and 5
	D	2 and 3
9	The suspense account shows a debit balance of $100. What could this balance be due to?
	A	Entering $50 received from A Turner on the debit side of A Turner's account
	B	Entering $50 received from A Turner on the credit side of A Turner's account
	C	Undercasting the sales day book by $100
	D	Undercasting the purchases account by $100
10	A suspense account shows a credit balance of $130. Which of the following could be due to?
	A	Omitting a sale of $130 from the sales ledger
	B	Recording a purchase of $130 twice in the purchases acc
	C	Failing to write off a bad debt of $130
	D	Recording an electricity bill paid of $65 by debiting the bank account and crediting the electricity account