The debit total of a trial balance is short by Rs. 1,200 because the total of the Discount Allowed Account was accidentally left out of the trial balance. Which entry corrects the error?
Correct answer: B. Debit Discount Allowed Rs. 1,200, credit Suspense Rs. 1,200
- A. Debit Suspense Rs. 1,200, credit Discount Allowed Rs. 1,200
- B. Debit Discount Allowed Rs. 1,200, credit Suspense Rs. 1,200
- C. Debit Discount Received Rs. 1,200, credit Suspense Rs. 1,200
- D. Debit Discount Allowed Rs. 1,200, credit Cash Rs. 1,200
Explanation
Discount Allowed has a debit balance, so it must be debited to bring its omitted amount into the trial balance. Because the debit side was previously short, Suspense is credited to remove the temporary 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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