Difference of totals of both debit and credit side of the trial balance is transferred to _________.

miscellaneous account

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difference account

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trading account

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suspense account

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Solution

The correct option is D suspense account
Accounting is based on the dual aspect concept. Whereas every business transaction affects two account. For every debit there will be a credit and vice-versa. In such situation trial balance must be tallied.

But due to some clerical error done while doing the accounting, there are chances that trial balance will not agree. In such case, the difference in trial balance is transferred to a temporary account named as "suspense a/c".

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Similar questions

State true or false:

1) A Trial balance is an account.
2) A Trial balance is helpful for preparation of final accounts.
3) A Trial balance is most important document.
4) A Trial balance may be prepared on any date.
5) In Trial balance opening stock is recorded in credit balance column.
6) Both sides total of an account are taken in Gross Trial Balance.
7) Purchase account always shows debit balance.
8) A Trial balance is a List of Ledger balances.
9) A Trial balance does not ensure accounting accuracy.
10) A Trial balance shows only arithmetical accuracy.

Q. If the trial balance do not agree after transferring the balance of ledger accounts including cash and bank balance and also errors are not located timely, then the trial balance is tallied by transferring the difference of debit and credit side to an account known as -

Q. An account has a credit balance,if the total of credit side is greater than the total debit side.

Q. An account has a debit balance if the total of credit side is greater than the total of debit side.

Q. If the trial balance do not agree after transferring the balance of all ledger accounts including cash and bank balance and also errors are not located timely, then the trial balance is tallied by transferring the difference of debit and credit side to an account knows as_____________.

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