Question

Which of the following errors shall be rectified by using a Suspense Account?

• A. Purchase of Plant and Equipment incorrectly debited to Purchases Account Rs 20,000.
• B. Outstanding telephone bill of Rs 510 was not recorded in the books.
• C. A cash sale of Rs 7600 has been recorded as Rs 6700 in the sales account although correctly entered in cash book.
• D. Rent of one month of Rs. 2,500 was recorded in the books as rent of the residential house of the proprietor.

Answer 1

The correct option is C

A cash sale of Rs 7600 has been recorded as Rs 6700 in the sales account although correctly entered in cash book.

A cash sale of Rs 7600 has been recorded as Rs 6700 in the sales account although correctly entered in cash book will effect the balancing of trial balance, hence it shall be rectified by using a suspense account.