Bank charges of Rs. 450 shown on the bank statement have not been entered in the business books. Which entry records the omission?
Correct answer: A. Debit Bank Charges, credit Bank Account
- A. Debit Bank Charges, credit Bank Account
- B. Debit Bank Account, credit Bank Charges
- C. Debit Suspense, credit Bank Charges
- D. Debit Bank Charges, credit Suspense Account
Explanation
Bank charges are an expense, so Bank Charges Account is debited. The bank balance decreases, requiring a credit to Bank Account. Since neither side was recorded, a suspense account is not needed.
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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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