accounting question - suspense a/c

SChique00

Hi all, if anyone could help me with this adjustment I'd really appreciate it:

(i) a private debt for €3400 owed to O'Farrell has been offset against a business debt of €3150 owed by the firm. The only entry made in the books in respect of this offset was a credit of €3400 in the creditors account.

raz789

So I think this is right,

Do out your T accounts, you'll have Creditors, Discount and Drawings.
Make sure you use two different coloured pens.

In the creditors T account put in 3400 on the credit side. First thing is this shouldn't have been placed here so take it out by placing 3400 on the other side. Then place 3150 on the debit side of this account.

The discount account should have 250 on the debit side of it.

And drawings should have 3400 on the credit side.

There should be a suspense of 3400. Suspense will be on the credit side.

Blue figures should go into the journal. Check marking scheme I think this is right.

SChique00

raz789 wrote: »

So I think this is right,

Do out your T accounts, you'll have Creditors, Discount and Drawings.
Make sure you use two different coloured pens.

In the creditors T account put in 3400 on the credit side. First thing is this shouldn't have been placed here so take it out by placing 3400 on the other side. Then place 3150 on the debit side of this account.

The discount account should have 250 on the debit side of it.

And drawings should have 3400 on the credit side.

There should be a suspense of 3400. Suspense will be on the credit side.

Blue figures should go into the journal. Check marking scheme I think this is right.

cheers, appreciate it - the fact that it was a private debt owed to the account holder threw me off a little, it's usually the other way around :pac:

If you're still there, would you mind looking at this one? Anyone else knocking around, any help would be appreciated also:

O'Farrell sent a cheque for €780 in full settlement of a business debt of €820 (entered correctly in the books). But no entry had been made of the subsequent dishonouring of this cheque and the payment of €400 cash by O'Farrell.

raz789

This is a tricky one,

Our Accounts; Creditors, Bank, Cash and Discount.

In creditors the 820 needs to be taken out. As this figure was entered on the debit side we must credit 820. But the cash cleared some of the debt, so cash on the debit side of 400.

The cash had not been entered at all so we must enter this into the cash account. Since it was on debit side of creditors it goes on the credit side of cash. A figure of 400.

Bank had the cheque in it of 780 on the credit side. This needs to be taken out so we debit 780.

Finally discount of 40 was originally on the credit side of the discount account. It needs to be taken out so we debit 40.

Blue figures go in the journal. Also some advice, you can use your trial balance from Q1 on the paper to see what sides accounts like creditors are on.
Also a Q are you in LC?

SChique00

raz789 wrote: »

This is a tricky one,

Our Accounts; Creditors, Bank, Cash and Discount.

In creditors the 820 needs to be taken out. As this figure was entered on the debit side we must credit 820. But the cash cleared some of the debt, so cash on the debit side of 400.

The cash had not been entered at all so we must enter this into the cash account. Since it was on debit side of creditors it goes on the credit side of cash. A figure of 400.

Bank had the cheque in it of 780 on the credit side. This needs to be taken out so we debit 780.

Finally discount of 40 was originally on the credit side of the discount account. It needs to be taken out so we debit 40.

Blue figures go in the journal. Also some advice, you can use your trial balance from Q1 on the paper to see what sides accounts like creditors are on.
Also a Q are you in LC?

Thanks again - I know it seems like I've not got much knowledge of suspense but I do. The book that I'm using for revision, Graded Accounting Questions, has adjustments and questions which are much more awkward than the ones in the exam papers, but I'm trying to challenge myself.
And yes, I am