A cash sale of $200,000$ naira was recorded as a debit to Cash and a credit to Sales. Later it was discovered that the sale was on credit, so Cash should not have been debited; instead Accounts Receivable should have been debited. To correct the error, the accountant made a single entry debiting Suspense $200,000$ and crediting Cash $200,000$, but omitted the required debit to Accounts Receivable and credit to Suspense. After this correction, what is the balance in the Suspense Account and by how much is the trial balance out of balance?

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Suspense Account has a debit balance of 200,000 naira; the trial balance is out of balance by 200,000 naira (debits exceed credits).

Neco Model Questions Vol1 2021 Financial Accounting Question 21

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