A credit purchase of Rs. 12,000 is entered in the Purchases Book, but the supplier's account is not posted. Which entry rectifies the error?
Correct answer: B. Debit Suspense Rs. 12,000 and credit Supplier Rs. 12,000
- A. Debit Supplier Rs. 12,000 and credit Suspense Rs. 12,000
- B. Debit Suspense Rs. 12,000 and credit Supplier Rs. 12,000
- C. Debit Purchases Rs. 12,000 and credit Supplier Rs. 12,000
- D. Debit Supplier Rs. 12,000 and credit Purchases Rs. 12,000
Explanation
Purchases has already received its debit, but the supplier still needs a credit of Rs. 12,000. Because only one side was missing, Suspense is debited to complete the correction.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Correction of Errors and Suspense Accounts
34 free Correction of Errors and Suspense Accounts MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Correction of Errors and Suspense Accounts questions
The sales book is undercast by Rs. 2,700. Which journal entry corrects this error when a suspense account is in use?
Goods purchased on credit for Rs. 8,040 are recorded as Rs. 8,400 in both Purchases Account and the supplier's account. Which entry rectifies the error?
After all errors causing a trial balance difference have been rectified, what should normally happen to the suspense account?
Cash received from a debtor of Rs. 5,000 is entered correctly in Cash Account, but the debtor's account is debited instead of credited. Which rectifying entry is required?
An insurance payment of Rs. 3,600 is debited to Rent Account instead of Insurance Account. Which entry rectifies the error?
A trial balance has total debits of Rs. 94,000 and total credits of Rs. 89,500 before correction. What balance is placed in the Suspense Account?