The sales book is undercast by Rs. 2,700. Which journal entry corrects this error when a suspense account is in use?
Correct answer: B. Debit Suspense Rs. 2,700 and credit Sales Rs. 2,700
- A. Debit Sales Rs. 2,700 and credit Suspense Rs. 2,700
- B. Debit Suspense Rs. 2,700 and credit Sales Rs. 2,700
- C. Debit Sales Rs. 2,700 and credit Cash Rs. 2,700
- D. Debit Suspense Rs. 5,400 and credit Sales Rs. 5,400
Explanation
An undercast sales book means Sales Account has been credited too little. Sales is credited with Rs. 2,700, while Suspense is debited because the credit side of the trial balance was short.
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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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