Day: August 17, 2024

When Alex plc’s trial balance failed to agree, a suspense account was opened for the difference.

The trial balance totals were:

Debit £864,390
Credit £860,930

The company does not have control accounts set-up for its receivables and payables ledgers.

Which of the following errors can be corrected without affecting the suspense account?

Select ONE answer:

1. In recording an issue of shares at par, cash received of £333,000 was credited to the equity share capital account as £330,000.
2. Cash £2,800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset account.
3. A cheque for £78,400 paid for the purchase of a car was debited to the motor vehicles account as £87,400.
4. A contra between the receivables ledger and the payables ledger for £1,200 was debited in the receivables ledger and credited in the payables ledger.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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