This set covers choosing between suspense and direct correction, writing correcting journals, clearing a suspense account and finding corrected profit. All businesses and figures are fictional and written for this page.
Work on paper first, with a ruled journal. Open each answer only after you have written yours, then compare line by line, not just the final figure. The questions are ordered from easier to harder.
Questions and worked answers
Question 1. For each error, say whether the trial balance would still agree.
- (a) A credit sale of RM 360 was completely omitted.
- (b) A receipt of RM 90 from a customer was debited to cash, and the credit was never posted.
- (c) Shop shelving costing RM 1,100 was debited to purchases.
- (d) Telephone of RM 75 was debited to electricity.
- (e) A sales day book total of RM 5,000 was debited to receivables as RM 5,000 but credited to sales as RM 4,500.
- (f) A purchase of RM 480 was recorded as RM 840 in both purchases and the supplier’s account.
Show answer
(a) Agrees: omission, both sides missing. (b) Does not agree: one-sided, a credit is missing. (c) Agrees: principle, capital item charged as an expense. (d) Agrees: commission, both expenses. (e) Does not agree: debit 5,000 against credit 4,500, a difference of RM 500. (f) Agrees: original entry, same wrong amount on both sides.
Only (b) and (e) need a suspense account.
Question 2. Name the type of error in each of (a) to (f) from Question 1.
Show answer
(a) Omission. (b) Single-sided posting (credit missing). (c) Principle. (d) Commission. (e) Different amounts on the debit and credit sides. (f) Original entry.
Question 3. Equipment costing RM 2,400, bought on credit from Dunia Supplies, was debited to the purchases account. Write the correcting journal.
Show answer
Done: debit Purchases 2,400, credit Dunia Supplies 2,400. Should be: debit Equipment 2,400, credit Dunia Supplies 2,400. The supplier is already right.
Debit Equipment RM 2,400, credit Purchases RM 2,400.
Question 4. A payment of RM 150 to a supplier, Hamid, was recorded as debit Cash RM 150 and credit Hamid RM 150. Write the correcting journal.
Show answer
The right entry is debit Hamid, credit Cash. The wrong entry has both sides reversed, so each account needs double the amount: 2 × 150 = 300.
Debit Hamid RM 300, credit Cash RM 300.
Check: Cash was debited 150 but should be credited 150, and a credit of 300 moves it from +150 to −150.
Question 5. Office repairs of RM 260 were debited to the rent account. Write the correction and state the effect on profit.
Show answer
Both accounts are expenses, so this is commission. Debit Repairs RM 260, credit Rent RM 260. There is no effect on profit because total expenses are unchanged.
Question 6. A trial balance shows debits of RM 42,865 and credits of RM 43,115. (a) Open the suspense account. (b) The difference arose because a payment of RM 250 to a supplier, Rahim, was credited to cash but never debited to Rahim. Write the correction and show the suspense account.
Show answer
(a) Credits are 43,115 − 42,865 = RM 250 larger, so suspense takes a debit balance of RM 250.
(b) Debit Rahim RM 250, credit Suspense RM 250.
Suspense: debit 250 (opening), credit 250 (correction), balance nil.
Question 7. A trial balance shows debits of RM 31,420 and credits of RM 31,180. (a) State the suspense balance and side. (b) It is caused by: a discount received of RM 60 debited to the supplier but never credited to discount received, and a sale of RM 900 debited to a customer as RM 900 but credited to sales as RM 720. Write the corrections and show suspense reaching nil.
Show answer
(a) Debits are 31,420 − 31,180 = RM 240 larger, so suspense takes a credit balance of RM 240.
(b) The first error left a credit of RM 60 missing. The second left credits short by 900 − 720 = RM 180. Total 60 + 180 = RM 240, which matches.
Debit Suspense RM 60, credit Discount received RM 60. Debit Suspense RM 180, credit Sales RM 180.
Suspense: credit 240 (opening), debits 60 + 180 = 240, balance nil.
Question 8. Net profit was first calculated as RM 31,200. Then these were found: (a) a delivery van costing RM 5,500 was debited to motor expenses; (b) the owner’s personal grocery bill of RM 140 was debited to general expenses; (c) rates of RM 300 were debited to insurance; (d) interest received of RM 75 was omitted. Calculate the corrected profit.
Show answer
(a) Expenses overstated, +5,500. (b) Drawings, not an expense, +140. (c) Both expenses, nil. (d) Income omitted, +75.
Adjustments: 5,500 + 140 + 0 + 75 = 5,715.
Corrected profit = 31,200 + 5,715 = RM 36,915.
Check by steps: 31,200 + 5,500 = 36,700, plus 140 is 36,840, plus 75 is 36,915.
Question 9. The sales account was over-added by RM 200 and the rent account was over-added by RM 200. (a) Does the trial balance agree? (b) Is a suspense account needed? (c) What is the effect on profit?
Show answer
(a) Yes. Sales (a credit) is RM 200 too high and rent (a debit) is RM 200 too high, so the totals stay equal. This is a compensating error. (b) No, suspense is not needed. (c) Income is overstated by 200 and expenses by 200, so profit is unchanged, but both accounts are wrong and are corrected: debit Sales RM 200, credit Rent RM 200.
Question 10. A trial balance difference of RM 330 was placed in suspense as a debit balance. Net profit was RM 18,400. Two errors are found: (a) a purchases day book total of RM 1,950 was credited to the supplier for RM 1,950 but debited to purchases for RM 1,620; (b) equipment costing RM 900 was debited to repairs. Write the journals, show suspense reaching nil, and find the corrected profit.
Show answer
(a) Debits were short by 1,950 − 1,620 = RM 330, which explains the suspense balance. Debit Purchases RM 330, credit Suspense RM 330. Purchases were understated, so profit falls by 330.
(b) Both sides are present, so suspense is not used. Debit Equipment RM 900, credit Repairs RM 900. Expenses were overstated, so profit rises by 900.
Suspense: debit 330 (opening), credit 330, balance nil.
Corrected profit: 18,400 − 330 + 900 = RM 18,970. Check: −330 + 900 = +570, and 18,400 + 570 = 18,970.
If you got these wrong
Match the kind of slip to the lesson that repairs it.
| What went wrong | Where to look |
|---|---|
| Used suspense when the totals still agreed, or the other way round | Identify which error needs a suspense account |
| Correction repeated the original posting, or used the wrong amount for a reversal | Write a correcting entry without repeating the original error |
| Corrected profit had the wrong direction, or changed for an expense moved to another expense | Calculate the effect on profit |
| Suspense did not reach nil, or ended on the wrong side | Reconcile a suspense balance to zero |
| Confused omission, principle and commission | Distinguish an omission from an error of principle |
How to use this set well
Attempt each question without notes, then redo any you missed after a day. Keep a record of which type of slip appears, because one repeated habit is easier to fix than ten scattered ones. The mistake log and retest queue is built for exactly that, and the double-entry and ledger trainer lets you test where an entry lands.
Return to the suspense and correcting errors module for the study route. If you want someone to watch your journals as you write them, online one-to-one Accounting tuition is one way to get that.