A trial balance had a suspense account with a credit balance of 1,720. Errors found: (1) Purchases returns balance of 440 omitted from trial balance; (2) Bank overdraft balance understated by 90. What is the updated credit balance of the suspense account?

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SSC Financial and Cost Accounting P-1 QUESTION #6135

Question 1

A trial balance had a suspense account with a credit balance of $1,720. Errors found: (1) Purchases returns balance of $440 omitted from trial balance; (2) Bank overdraft balance understated by $90. What is the updated credit balance of the suspense account?

$1,190
$1,370
$2,070✔️
$2,250

Correct Answer Explanation

Option C ($2,070) is correct.

Error 1: Purchases returns (credit balance) omitted → credit total understated → Credit suspense $440.

Error 2: Bank overdraft (credit balance) understated → Credit suspense $90.

Updated balance = $1,720 + $440 − $90 = $2,070

More Options