Correcting errors: the journal and the suspense account

Journal entries

Each correction shows the account debited, the account credited, the amounts and a narrative explaining the error. Work out three things: what was done, what should have been done, and the entry that turns one into the other.

• Error of principle: machine repairs £800 debited to Machinery. Debit Repairs £800, credit Machinery £800. Narrative: 'Correction of error of principle: repairs wrongly debited to Machinery account.'
• Error of commission: cheque £1,250 from K. Shah credited to S. Shah. Debit S. Shah £1,250, credit K. Shah £1,250.
• Complete reversal: correct with double the amount (one to cancel, one to post correctly).
• Omission: make the full entry now.
• Original entry: adjust both accounts by the difference.

The suspense account

When the trial balance disagrees, the difference is put into a suspense account. As each one-sided error is found, the correcting journal has suspense as one of its entries, until the suspense balance is zero.

Only errors that affected the trial balance totals go through suspense: one-sided entries, unequal amounts, casting errors, wrong side.

Suspense account

Working out the suspense entries

For each error ask: which single account is wrong, and by how much?

• Discount allowed £240 posted to customers but not to the Discount allowed account: debit Discount allowed £240, credit Suspense.
• Purchases day book undercast by £300 (suppliers correct): debit Purchases £300, credit Suspense.
• Rent received £450 entered in the Rent received account as £540 (bank correct): debit Rent received £90, credit Suspense.

The three credits to suspense total the original debit balance, so suspense is cleared.

Worked example

Sales returns of £180 were credited to the Sales returns account (the customer's account was correctly credited). Give the journal entry.

1. Done: credit Sales returns £180 (and credit customer £180), so credits exceed debits by £360.
2. Should be: debit Sales returns £180.
3. To move from a £180 credit to a £180 debit needs a debit of £360.

Answer: Debit Sales returns £360, credit Suspense £360. Narrative: correction of sales returns posted to the wrong side.

Check yourself

1. A trial balance did not agree. The only errors were: discount allowed of £240 not posted to the Discount allowed account; the purchases day book undercast by £300; rent received of £450 entered as £540 in the Rent received account. What was the opening balance on the suspense account?
   Show answer

   £630. Each error made debits too small or credits too large: 240 + 300 + 90 = 630, a debit balance in suspense.

2. Office furniture costing £2,500 was debited to the Purchases account. Which journal entry corrects this?
   • Debit Purchases £2,500, credit Office furniture £2,500
   • Debit Office furniture £2,500, credit Purchases £2,500
   • Debit Office furniture £2,500, credit Suspense £2,500
   • Debit Suspense £2,500, credit Purchases £2,500
   Show answer

   Debit Office furniture £2,500, credit Purchases £2,500. An error of principle does not affect the trial balance, so suspense is not used.

3. Which error requires an entry in the suspense account?
   • A sale was not recorded at all
   • Electricity was debited to the Rates account
   • A purchase invoice of £720 was entered in the day book as £270
   • A payment to a supplier was posted to the supplier's account but not to the Bank account
   Show answer

   A payment to a supplier was posted to the supplier's account but not to the Bank account. Only one side was posted, so the trial balance disagrees.

4. Discount received of £95 was debited to the Discount received account (the supplier's account was correctly debited). What amount is needed in the correcting journal entry?
   Show answer

   £190. To move from a £95 debit to a £95 credit needs a credit of 190: debit Suspense, credit Discount received.

5. Cash sales of £600 were debited to Sales and credited to Cash. Which entry corrects this?
   • Debit Cash £600, credit Sales £600
   • Debit Sales £1,200, credit Cash £1,200
   • Debit Cash £1,200, credit Sales £1,200
   • Debit Suspense £600, credit Sales £600
   Show answer

   Debit Cash £1,200, credit Sales £1,200. A complete reversal needs double the amount to reverse the wrong entry and post the right one.

6. Why does a journal entry include a narrative?
   • To explain the reason for the entry so it can be checked later
   • To show the balance of each account
   • Because the trial balance requires it
   • To record the cash paid
   Show answer

   To explain the reason for the entry so it can be checked later. The narrative provides an audit trail and explains unusual entries.

Practise with instant feedback Print this lesson

Sources

• Pearson Edexcel International Advanced Subsidiary/Advanced Level in Accounting specification (issue 2), Unit 1 and Appendices 6 to 8

Last updated 8 November 2026. Spotted a mistake? Tell us.