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?
Correct answer: B. A credit balance of Rs. 4,500
- A. A debit balance of Rs. 4,500
- B. A credit balance of Rs. 4,500
- C. A debit balance of Rs. 183,500
- D. A credit balance of Rs. 183,500
Explanation
The debit total exceeds the credit total by Rs. 4,500. A credit balance in Suspense brings the credit side up to the debit total.
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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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