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SSC Financial and Cost Accounting P-1 QUESTION #6106
Question 1

A suspense account was opened after a trial balance failed to agree. Errors found:

  1. Sales invoice for $1,240 completely omitted.
  2. Purchases entered as $85,600 instead of $87,580.
  3. Rent paid $2,600 posted as $6,200 in rent account.

What was the original balance on the suspense account?

  • $1,620 credit✔️
  • $1,620 debit
  • $5,580 credit
  • $5,580 debit
Correct Answer Explanation

Option A ($1,620 credit) is correct.

Only one-sided errors affect the suspense account:

  • Error 1 (complete omission): Does NOT affect suspense.
  • Error 2: Purchases understated by $1,980 → Debit Purchases, Credit Suspense $1,980.
  • Error 3: Rent overposted by $3,600 → Debit Suspense, Credit Rent $3,600.

Net: Dr $3,600 − Cr $1,980 = Dr $1,620 needed → original balance was $1,620 credit.