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Accounting Suspense Question

  • 19-03-2016 2:38pm
    #1
    koolis02
    Registered Users, Registered Users 2 Posts: 170 ✭✭


    Just wondering can anyone help me with this Suspense question, its from this years mock! I can't get it for the life of me... :confused:

    Dunne purchased stock on credit from Sports Suppliers Ltd for 2,000 plus VAT at 13.5%. The only entries in the accounts were that the VAT inclusive figure was entered on the debit side of the Equipment account and the VAT exclusive figure was entered on the credit side of Sports Suppliers Ltd

    thank you :p


Comments

  • #2
    randomlad727
    Registered Users, Registered Users 2 Posts: 29 ✭randomlad727


    Not sure If I am correct but this is what I would do: Debit the purchases account with 2270. (2000 + 13.5%) , credit the equipment account with 2270 to cancel out the incorrect entry, credit the creditors account with 270 as the VAT was excluded. Suspense is 270 debit.


  • #3
    koolis02
    Registered Users, Registered Users 2 Posts: 170 ✭✭koolis02


    randomlad727 wrote: »
    Not sure If I am correct but this is what I would do: Debit the purchases account with 2270. (2000 + 13.5%) , credit the equipment account with 2270 to cancel out the incorrect entry, credit the creditors account with 270 as the VAT was excluded. Suspense is 270 debit.

    Just seeing this now, thank you!:)


  • #4
    randomlad727
    Registered Users, Registered Users 2 Posts: 29 ✭randomlad727


    koolis02 wrote: »
    Just seeing this now, thank you!:)

    I actually think I might be wrong! I got a similar questions in class yesterday and our teacher told us there is a separate VAT account. Sorry for my mistake!


  • #5
    koolis02
    Registered Users, Registered Users 2 Posts: 170 ✭✭koolis02


    randomlad727 wrote: »
    I actually think I might be wrong! I got a similar questions in class yesterday and our teacher told us there is a separate VAT account. Sorry for my mistake!

    Do you know what to put into the VAT account?:o


  • #6
    bobert127
    Registered Users, Registered Users 2 Posts: 5 ✭bobert127


    Correct entries are: 2000 debit into purchases, 270 debit VAT account(asset account), and credit 2270 into creditors. And of course clear the other accounts of their errors to start :)


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