Question

Select the most appropriate alternatives from those given below and rewrite the sentence.

If the trial balance shows a short credit the suspense account will have a ________
a) debit
b) zero
c) credit
d) nil

Answer 1

If the trial balance shows a short credit the suspense account will have a Credit.

Explanation:
When the Trial Balance does not tally, the difference is transferred to a newly opened account known as Suspense Account. If the total of the debit column of the trial balance exceeds the total of the credit column of the Trial Balance, the difference is posted to the Suspense Account on the debit side of the Trial Balance, i.e. the suspense account will have a debit balance and if the total of the credit column of the Trial Balance exceeds the total of the debit column of the Trial Balance, the difference is posted to the Suspense Account on the credit side of the Trial Balance, i.e. the Suspense Account will have credit balance. When the errors are located, rectification entries are passed via Suspense Account. When all the errors are identified and rectification entries are passed, the suspense account will show zero balance.