ACCA F3 MCQ Suspense Account
Pam’s trial balance did not balance so she opened a suspense account with a balance of $250 credit. When investigating the difference, she discovered the following errors:
1. The sales day book was undercast by $4,000.
2. A loss on disposal of a non-current asset of $3,040 has been recorded in the sundry expense account as $.
3. One page of transactions from the purchases day book with a total of $ 1,000 has been posted to the payables control account, but no other entry has been made.
What is the balance on the suspense account after Pam has corrected the above errors?
| A. | -3,110 |
| B. | 890 |
| C. | -390 |
| D. | 250 |
| Answer. | B. |
| + means Debit | - means Credit |
Examiner's comment:
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Suspense accounts are an area that candidates find difficult so it was not surprising that this question was not as well answered as others. Overall, only 27% of candidates correctly answered this question.
Candidates needed to open up a suspense account and enter the opening balance, then work through the errors to determine if they affect the suspense account and if so, enter the adjustment. The key consideration when looking at errors is whether or not they affect the balancing of the trial balance. Only errors where the debit and credit do not equal each other will require adjustment through the suspense account.
The errors should be treated as follows:
• Error no 1 does not have any impact on the suspense account. The day book total is posted to the sales account and the receivables control account, so the incorrect total has been posted correctly and this does not cause the trial balance to be out of balance. This error will need correcting before final accounts can be prepared but not through the suspense account.
•
Error no 2 does require adjustment as there has been a transposition error in recording the loss on disposal and too much has been recorded. The adjustment is to:
Debit Suspense $360
Credit Sundry expenses $360
•
Error no 3 also requires adjustment in the suspense account as a one-sided entry has been made. There has been a credit to payables, but no corresponding debit to purchases so this must be corrected. The adjustment is to:
Debit Purchases $1,000
Credit Suspense $1,000
| Sundry Expenses | 360 | b/f | 250 |
| c/f | 890 | Purchases | 1,000 |
| Total | 1,250 | 1,250 |
The most common response for this question was A, which 38% of candidates selected. This posted all entries to the suspense account, which suggests that candidates need to have a better understanding of the function of day books and the posting of transactions into the ledger accounts.
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