A cheque issued to a supplier for Rs. 3,200 is entered in the Cash Book, but no entry is made in the supplier's account. Which rectifying entry is correct?
Correct answer: D. Debit Supplier Rs. 3,200 and credit Suspense Rs. 3,200
- A. Debit Cash Rs. 3,200 and credit Supplier Rs. 3,200
- B. Debit Suspense Rs. 3,200 and credit Supplier Rs. 3,200
- C. Debit Supplier Rs. 3,200 and credit Cash Rs. 3,200
- D. Debit Supplier Rs. 3,200 and credit Suspense Rs. 3,200
Explanation
The Cash Book already contains the credit, but the supplier's account lacks the corresponding debit. The correction therefore debits the supplier and credits Suspense to remove the one-sided difference.
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About Correction of Errors and Suspense Accounts
Accounting errors are corrected by journal entries after identifying whether the mistake affects one account or both sides of double entry. Suspense accounts temporarily hold an unexplained trial balance difference and must be cleared, while errors of omission, commission, principle, original entry and reversal require different corrections.
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