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Journals and suspense accounts

coombs86coombs86 New MemberRegistered Posts: 5
in AAT Level 2 (Level 5 in Scotland)
I am studying BA1 and I am stuck on one of my assignments - can anyone help?

The following errors have been discovered in the accounts for Aug 2010. A suspense account has been created as a result.

- Draw up journals to correct the errors.

a) a cheque for £600 was recorded in payments side of the bank, but no other entries have been made. it was meant to be for rent.

Currently I've put:

Rent 600 dr
Suspense 600 cr

is this correct?

b) a payment of £50 from a debtor has been debited to the SLCA and credited to the cash book.

How would i show this?? suspense account or not?

please help! :-)

Comments

  • RobClarkeRobClarke Experienced Mentor Registered Posts: 820
    Hi

    a) - Error of single transaction and yes you are correct as far as I can see


    b) This is an error of reversal and therefore would not be disclosed by the trial balance and so no suspense account needed - just Journal entries.

    And finally - I thought suspense accounts and correction of errors was a BA2 subject and not BA1??
  • coombs86coombs86 New Member Registered Posts: 5
    Im studying both BA1 and BA2 at the same time so I guess its intertwined...

    thanks for your help. I thought that too at first then got myself all confused and then didn't know what was what!!

    The examples in the text books weren't similar to the question so I started overthinking everything.
  • RobClarkeRobClarke Experienced Mentor Registered Posts: 820
    coombs86 wrote: »
    Im studying both BA1 and BA2 at the same time so I guess its intertwined...

    thanks for your help. I thought that too at first then got myself all confused and then didn't know what was what!!

    The examples in the text books weren't similar to the question so I started overthinking everything.

    never wise to overthink - usually means you end up with more questions! :001_tongue:
  • CeeJaySixCeeJaySix Well-Known Registered Posts: 645
    Just remember for b) you need to do the correction of £50 AND the transaction of £50, so you can either post a single amount of £100 or, if it helps you keep track, two separate identical transactions of £50 (correction and then the correct posting).
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