Accounting·Basic accounting systems · NSSCO 3.3
Errors & the Suspense account
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Everybody makes mistakes — and accounting has a calm, tidy system to find and fix them. We'll meet the six errors that slip past a balanced trial balance, the errors that make it disagree, the temporary Suspense account that holds the difference, how to correct errors through the General Journal, and how to adjust the profit and the Statement of Financial Position afterwards.
What you'll learn in this lesson
By the end you should be able to (NSSCO Accounting 3.3):
- State the errors which do not affect the Trial Balance
- Explain errors which do not affect the Trial Balance
- Explain the errors which affect the Trial Balance
- Explain the purpose of the Suspense account
- Make entries in a Suspense account to correct errors
- Prepare and post journal entries for correction of errors
- Adjust the profit or loss for an accounting period after the correction of errors
- Prepare a Statement of Financial Position in vertical format after the correction of errors
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Ms Pieters and Mike talk through the whole topic — with the figure and working drawn live.