13. Accounting Errors

Question 1

Does an error of total omission trigger a suspense account entry?

Answer 1

No - TB balances

Question 2

Does a one sided error of omission trigger a suspense account entry?

Answer 2

Yes

Question 3

Does an error of principle trigger a suspense account entry?

Answer 3

No

Question 4

Does an error of commission trigger a suspense account entry?

Answer 4

No

Question 5

Does an error of transposition trigger a suspense account entry?

Answer 5

Yes

Question 6

Does an error of one side of original entry value trigger a suspense account entry?

Answer 6

Yes

Question 7

Does an error of one side of original entry posted the wrong way trigger a suspense account entry?

Answer 7

Yes

Question 8

What is the purpose of a suspense account?

Answer 8

To correct errors where debits do not equal credits - must be cleared before financial statements are prepared

Question 9

How do we correct an error where debits = credits?

Answer 9

Journal entry

Question 10

What are the three steps needed to fix an error that involves a suspense account?

Answer 10

1. What double entry have we got?
2. What double entry do we want?
3. What double entry is required to correct?