A rent payment of Rs. 2,500 is posted to Rent Account as Rs. 5,200, while the Cash Account is correctly credited. Which entry corrects the error?
Correct answer: B. Debit Suspense Rs. 2,700 and credit Rent Rs. 2,700
- A. Debit Rent Rs. 2,700 and credit Suspense Rs. 2,700
- B. Debit Suspense Rs. 2,700 and credit Rent Rs. 2,700
- C. Debit Rent Rs. 5,200 and credit Cash Rs. 5,200
- D. Debit Cash Rs. 2,700 and credit Rent Rs. 2,700
Explanation
Rent is over-debited by Rs. 2,700, so it must be credited by that excess amount. The corresponding debit goes to Suspense because only the debit side was overstated.
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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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