When the totals of a trial balance do not agree, which account may be opened temporarily to locate the difference?
Correct answer: C. Suspense Account
- A. Drawings Account
- B. Trading Account
- C. Suspense Account
- D. Capital Account
Explanation
A suspense account may temporarily hold the difference when the trial balance fails to agree. It is cleared after the accounting errors are found and corrected.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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