The difference in trial balance is transferred to _________ if the errors are not identified.

suspense account

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memorandum account

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capital account

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profit & loss account

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Solution

The correct option is C suspense account
Ideally all errors have to be rectified before the end of the financial year. If the errors are not identified, than the difference in trial balance has to be transferred to a temporary account which is known as suspense account.

All rectification entries has to be passed through suspense account.

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Similar questions

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. 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_____________.

What kinds of errors would cause a difference in the trial balance? Also, list examples that would not be revealed by a trial balance?

State whether the following statements are True or False-

1) A trial balance can agree in spite of certain errors.
2) Errors committed due to lack of accounting knowledge are errors of omission.
3) Trial balance is prepared from the balance of ledger accounts.
4) Rectification entries are passed in cash book.
5) Single sided errors affect only one account.
6) Suspense account is automatically closed after rectification of all errors.
7) Errors affecting the agreement of trial balance are called on side errors.
8) There is no need to open a suspense account if the trial balance agrees.
9) All the errors can be rectified only through suspense account.
10) Compensating errors affect the agreement of trial balance.

Errors that affect one account will affect the agreement of the Trail balance. If the errors cannot be located immediately and rectified, then the difference in trial balance is kept in a separate account called ___

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