2. Suspense By
Maura Fehily

3. Pre-teaching
KWL Revise double entry Format of Trial Balance (reference simple Trial Balance)

4. Anticipation Exercise Anticipation Exercise
Name
Date
Topic
DOUBLE ENTRY
Score
Before After
Agree
Disagree
Statement 1
Debit is the same as Credit 2
Every business has debtors and creditors 3
Kanye West Income $28 million expenditure $43 million = overdraft 4
Cash received is put on the Dr side of the Cash Account 5
All transactions should be recorded in the accounts 6
Instructions: Guess answers, read passage, answer again, compare results
before & after
Name
Date
Topic
DOUBLE ENTRY
Score
Before After
Anticipation Exercise

5. 2 PEOPLE INVOLVED
RECEIVER GIVER

6. Debit Credit RECEIVER GIVER

7. QUESTIONS Adjustment in question 1
60 mark JOURNALISE, PROFIT & LOSS AND SUSPENSE
100 mark JOURNALISE, PROFIT & LOSS AND SUSPENSE BALANCE SHEET AND THEORY

8. Time Management
Adjustment in question mark question minutes Start with theory part of question Worth up to marks = %

9. Debits and Credits Dr Cr Assets Liabilities Expenses Gains Purchases
Sales

10. FIXED ASSETS
Machinery €100,000
Furniture €50,000
Equipment €30,000
CURRENT ASSETS
Closing Stock €20,000
Debtors €10,000
Suspense €1,000
CREDITORS AMOUNTS FALLING DUE WITHIN ONE YEAR
Creditors € 20,000
Bank €20,000
TOTAL NET ASSETS
FINANCED BY
Ordinary Share Capital €200,000
Share Premium
Net Profit
Capital Employed

11. Journal Entries Step 1 T accounts Step 2 Do the correct entry
Step 3 Look at what was incorrect and correct
Step 4 Dr in T account
Dr column in journal
Narration Note must explain entry

12. ALL JOURNAL ENTRIES WILL GO TO EITHER PROFIT AND LOSS OR BALANCE SHEET

13. Profit & Loss Pick out entries for profit and lossDR CR - +
Dr Journal = Minus Profit
Cr Journal = Plus Profit

14. Balance Sheet Entry in Dr Column = + Asset
Entry in Cr Column = - Asset
Entry in Cr Column = + Liability
Entry in Dr Column = - Liability

15. SUSPENSE You sell on credit to Debtors
You buy on credit from Creditors
If an entry is on the Dr side of the Ledger then it is posted to the Dr side of the Journal
If an entry is on the Cr side of the Ledger then it is posted to the Cr side of the Journal

16. A question on this topic has two types of adjustments, those errors that affect the balancing of the trial balance and those errors that are not revealed by the trial balance.
In the former a Suspense account is used temporarily to balance the trial balance.

17. Error not effecting Suspense
Insurance due €340 and rent prepaid to Sexton €460 were not recorded in the books. No entry therefore no Suspense So double entry is Dr Profit & Loss a/c 800 Cr Insurance Company 340 Cr Rent Prepaid 460 Narration Note

18. Corrected Net Profit
Profit & Loss entry on DR column of Journal It is a - Minus If on the CR Column of Journal It is a + Plus

19. Balance Sheet
The Insurance was due by Sexton so it is a Liability in Balance Sheet The Rent was prepaid to Sexton so it is also a Liability in Balance Sheet

20. Error effecting Suspense
Sexton returned furniture previously purchased on credit for €27,000. This was entered in the accounts as €37,000. //However, a credit note subsequently arrived from the supplier showing a transport charge of €500.// The only entry made in respect of this credit note is a credit entry of €26,500 in the creditor’s account.

21. Correct entry DR CR CREDITORS A/C Purchase Returns 26,500 PURCHASE
RETURNS A/C
Creditors ,500

22. Correcting Error Dr Creditors a/c Cr Purchase Returns 500
Suspense ,500
Purchase Returns ,000
Purchase
Returns a/c
Creditors
Creditors ,000
Suspense
a/c
Creditors ,500

23. Journal Entry DR CR Purchase Returns 500 Creditors 10,000 26,500
Suspense

24. Alternative Journal DR CR Purchase returns 10,500 Creditors 16,000
Suspense
26,500

25. Corrected Net Profit
- + Purchase Returns (Dr Column) Therefore - minus

26. Balance Sheet
Creditors are a Liability Therefore Dr ENTRY is a minus for Creditors in Creditors: amounts falling due within 1 Year.