Trial Balance, Errors and Suspense Account

Question 1

What are the errors which do not cause an imbalance in the TB

Answer 1

Error of Omission - Both sides of the transaction have been left out
Error of Original Entry - Dr = Cr but the amount is incorrect
Reversal of entries - Debit and Credit entires have been reversed
Error of principle - Wrong type of account
Error of Commission - Wrong account but not wrong type of account. Different expense account

Question 2

Errors which will be corrected through a journal?

Answer 2

Where onyl oen side of the entry has been made
Two Debits or Two credits error

Question 3

When to use a Suspense account?

Answer 3

When Trial Balance doesn’t balance, suspense used temporarily. Never used in the final accounts.

Question 4

Steps to help deal with errors?

Answer 4

What was the error?
What should it be?
Fix it!

Question 5

In the trial balance if there are more debits than credits does this indicate a profit or loss?

Answer 5

Loss

Question 6

In the TB if there are more credits than debits does this indicate a profit or loss?

Answer 6

Profit

Question 7

Is accumulated depr a debit or credit on SFP or SPL

Answer 7

SFP Credit. Reducing Value of asset

Question 8

Is Depr a debit or credit on SFP or SPL?

Answer 8

SPL Debit

Question 9

Where is Closing Inventory on the TB?

Answer 9

SPL Credit SFP Debit

Question 10

Where is Opening Inventory on the TB?

Answer 10

SPL Debit