Free Correction of Errors and Suspense Accounts MCQs with Answers
34 Correction of Errors and Suspense Accounts MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
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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- A. It causes the debit total to exceed the credit total
- B. It causes the credit total to exceed the debit total
- C. It creates a permanent debit balance in suspense
- D. It does not affect the agreement of the trial balance
Explanation: A complete omission leaves both the debit and credit aspects unrecorded.
Correct answer: It does not affect the agreement of the trial balance- A. Posting only one side of a double entry
- B. Complete omission of a business transaction
- C. Recording a capital item as a revenue item
- D. Making two equal and opposite errors
Explanation: Posting only one side records an unequal amount in the ledger, so the trial balance fails to agree.
Correct answer: Posting only one side of a double entry- A. Debit Suspense Account Rs. 4,000
- B. Debit Purchases Account Rs. 4,000
- C. Credit Suspense Account Rs. 4,000
- D. Credit Purchases Account Rs. 4,000
Explanation: The purchases account has been debited by Rs. 4,000 less than required.
Correct answer: Debit Purchases Account Rs. 4,000- A. Error of complete omission
- B. Error of commission
- C. Error of principle
- D. Compensating error
Explanation: A machine is a capital asset, whereas purchases normally represent goods bought for resale.
Correct answer: Error of principle- A. Errors of original entry
- B. Errors of principle
- C. Errors of complete omission
- D. Compensating errors
Explanation: Compensating errors offset one another in amount and effect on the trial balance.
Correct answer: Compensating errors- A. A debit balance equal to the difference
- B. A credit balance equal to the difference
- C. A nil balance before rectification
- D. A balance equal to total capital
Explanation: When credits exceed debits, the debit side is short by the difference. Suspense is placed on the shorter debit side, so it shows a debit…
Correct answer: A debit balance equal to the difference- A. Debit Cash Rs. 7,500 and credit Suspense Rs. 7,500
- B. Debit Suspense Rs. 7,500 and credit Cash Rs. 7,500
- C. Debit Creditor Rs. 7,500 and credit Cash Rs. 7,500
- D. Debit Cash Rs. 7,500 and credit Creditor Rs. 7,500
Explanation: The creditor's account already contains the correct debit, but the credit to cash is missing.
Correct answer: Debit Suspense Rs. 7,500 and credit Cash Rs. 7,500- A. The debit total exceeds the credit total by Rs. 8,100
- B. The credit total exceeds the debit total by Rs. 8,100
- C. The suspense account shows a debit of Rs. 9,000
- D. The trial balance remains in agreement
Explanation: The incorrect amount is posted to both the customer's account and the Sales Account. Although both accounts are understated by Rs.
Correct answer: The trial balance remains in agreement- A. It is an error of principle that may not affect the trial balance
- B. It is an error of omission that always creates suspense
- C. It is an error of commission that makes debits exceed credits
- D. It is a compensating error that requires two wrong entries
Explanation: The transaction is recorded in the wrong type of account because disposal proceeds are not ordinary sales revenue.
Correct answer: It is an error of principle that may not affect the trial balance- A. It should retain a debit balance for future adjustments
- B. It should have a nil balance after correction
- C. It should retain a credit balance as a control account
- D. It should be transferred to the capital account
Explanation: A suspense account is temporary and holds the unexplained trial balance difference.
Correct answer: It should have a nil balance after correction- A. Debit Suspense Rs. 360 and credit Supplier Rs. 360
- B. Debit Purchases Rs. 360 and credit Supplier Rs. 360
- C. Debit Supplier Rs. 360 and credit Purchases Rs. 360
- D. Debit Supplier Rs. 8,040 and credit Purchases Rs. 8,040
Explanation: Both accounts are overstated by Rs. 360, so the supplier is debited and Purchases is credited to reduce them.
Correct answer: Debit Supplier Rs. 360 and credit Purchases Rs. 360- A. Debit Sales Rs. 2,700 and credit Suspense Rs. 2,700
- B. Debit Suspense Rs. 5,400 and credit Sales Rs. 5,400
- C. Debit Sales Rs. 2,700 and credit Cash Rs. 2,700
- D. Debit Suspense Rs. 2,700 and credit Sales Rs. 2,700
Explanation: An undercast sales book means Sales Account has been credited too little. Sales is credited with Rs.
Correct answer: Debit Suspense Rs. 2,700 and credit Sales Rs. 2,700- A. Debit Suspense Rs. 12,000 and credit Supplier Rs. 12,000
- B. Debit Supplier Rs. 12,000 and credit Suspense Rs. 12,000
- C. Debit Purchases Rs. 12,000 and credit Supplier Rs. 12,000
- D. Debit Supplier Rs. 12,000 and credit Purchases Rs. 12,000
Explanation: Purchases has already received its debit, but the supplier still needs a credit of Rs. 12,000.
Correct answer: Debit Suspense Rs. 12,000 and credit Supplier Rs. 12,000- A. Debit Suspense Rs. 5,000 and credit Debtor Rs. 5,000
- B. Debit Debtor Rs. 10,000 and credit Suspense Rs. 10,000
- C. Debit Suspense Rs. 10,000 and credit Debtor Rs. 10,000
- D. Debit Debtor Rs. 5,000 and credit Cash Rs. 5,000
Explanation: The debtor was wrongly debited by Rs. 5,000 and should instead be credited by Rs. 5,000. A credit of Rs.
Correct answer: Debit Suspense Rs. 10,000 and credit Debtor Rs. 10,000- A. Debit Rent Rs. 3,600 and credit Insurance Rs. 3,600
- B. Debit Insurance Rs. 7,200 and credit Rent Rs. 7,200
- C. Debit Suspense Rs. 3,600 and credit Insurance Rs. 3,600
- D. Debit Insurance Rs. 3,600 and credit Rent Rs. 3,600
Explanation: The amount is already recorded on the correct side, but in the wrong expense account.
Correct answer: Debit Insurance Rs. 3,600 and credit Rent Rs. 3,600- A. A credit balance of Rs. 4,500
- B. A debit 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.
Correct answer: A credit balance of Rs. 4,500- A. Debit Returns Inward Rs. 3,000 and credit Sales Rs. 3,000
- B. Debit Returns Inward Rs. 3,000, debit Sales Rs. 3,000 and credit Suspense Rs. 6,000
- C. Debit Sales Rs. 3,000 and credit Returns Inward Rs. 3,000
- D. Debit Suspense Rs. 6,000 and credit Returns Inward Rs. 6,000
Explanation: Returns Inward needs a debit of Rs. 3,000, while the incorrect credit to Sales must be cancelled by a debit of Rs. 3,000.
Correct answer: Debit Returns Inward Rs. 3,000, debit Sales Rs. 3,000 and credit Suspense Rs. 6,000- A. Debit Supplier Rs. 2,200 and credit Suspense Rs. 2,200
- B. Debit Suspense Rs. 4,400 and credit Supplier Rs. 4,400
- C. Debit Supplier Rs. 4,400 and credit Suspense Rs. 4,400
- D. Debit Purchase Returns Rs. 2,200 and credit Supplier Rs. 2,200
Explanation: The supplier should have been debited by Rs. 2,200 but was credited by that amount. A debit of Rs.
Correct answer: Debit Supplier Rs. 4,400 and credit Suspense Rs. 4,400- A. Debit Wages Rs. 4,600 and credit Cash Rs. 4,600
- B. Debit Suspense Rs. 1,800 and credit Wages Rs. 1,800
- C. Debit Wages Rs. 1,800 and credit Suspense Rs. 1,800
- D. Debit Suspense Rs. 6,400 and credit Wages Rs. 6,400
Explanation: Wages is short-debited by Rs. 1,800, calculated as Rs. 6,400 less Rs. 4,600.
Correct answer: Debit Wages Rs. 1,800 and credit Suspense Rs. 1,800- A. Debit Supplier Rs. 11,000 and credit Purchases Rs. 11,000
- B. Debit Purchases Rs. 11,000 and credit Supplier Rs. 11,000
- C. Debit Suspense Rs. 11,000 and credit Purchases Rs. 11,000
- D. Debit Cash Rs. 11,000 and credit Supplier Rs. 11,000
Explanation: The duplicate entry has overstated both Purchases and the supplier's liability by Rs. 11,000.
Correct answer: Debit Supplier Rs. 11,000 and credit Purchases Rs. 11,000Correction of Errors and Suspense Accounts MCQs: common questions
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