E T B Best PGDM Institute in Delhi PGDM Course in Delhi MBA AGU Best PGDM College in Delhi NCR Best MBA Colleges in Bangalore Best School in Noida Top Boarding School in Noida Top Boarding School in Delhi

Rs. 2600 stolen by an ex employee stood debited to the suspense A/c.Rectify the error.

Sir,

According to me it should be

Loss by theft 5200
To suspense a/c 5200
But in book the amount is 2600. pls Clear my confusion as to why 2600????

asked Oct 17, 2014 in Rectification of Errors by dalmia.swati (15 points) 693 views

1 Answer

0 votes
Suspense A/c is used to rectify one-sided errors.  For example if it comes to our notice that employee had stolen 2600 and with that cash will be short by Rs.2600.  To rectify this the entry should be:

Loss of Cash due to theft   A/c     Dr  2600.

  To Cash A/c                                                   2600

Now I assume that they credited cash a/c but did not debit Loss of Cash due to theft a/c.  Due to this credit side of Trial Balance will be more by Rs.2600.  Hence Suspense A/c will be debited by Rs.2600.  So when rectifying entry will be put, it will be:

Loss of Cash due to Theft A/c    Dr  2600

  To Suspense A/c                                        2600

So according to me suspense A/c will be credited by Rs.2600.  Balance in suspense A/c will become nil and in the trial balance Loss of Cash due to Theft A/c will appear on the debit     side and trial balance will tally.
answered Oct 17, 2014 by jbsclasses (3,971 points)
...