After opening a Suspense account in the General Ledger, a bookkeeper might find that all or part of the difference was caused when the trial balance was prepared (so no errors were made in the General Ledger).
When this happens we will amend the trial balance and also make an amendment to the Suspense account in the General Ledger. No other account will need to be changed in the General Ledger as the error was made on the Trial Balance.
Illustration
A business’ bookkeeper has prepared a trial balance shown below:
| Account | Debit | Credit |
| Bank | £3,047 | |
| Capital | £4,720 | |
| Machinery | £8,000 | |
| Purchases | £14,520 | |
| Sales | £31,056 | |
| Wages expense | £3,970 | |
| Office expenses | £1,464 | |
| Sales ledger control | £7,139 | |
| Purchases ledger control | £1,960 | |
| VAT | £944 | |
| TOTAL | £38,140 | £38,680 |
As the totals of the debit and credit columns differed by £540, the bookkeeper opened a Suspense account on the debit side using the following journal
| Account | Debit | Credit |
| Suspense | £540 |
The amended trial balance would be as follows:
| Account | Debit | Credit |
| Bank | £3,047 | |
| Capital | £4,720 | |
| Machinery | £8,000 | |
| Purchases | £14,520 | |
| Sales | £31,056 | |
| Wages expense | £3,970 | |
| Office expenses | £1,464 | |
| Sales ledger control | £7,139 | |
| Purchases ledger control | £1,960 | |
| VAT | £944 | |
| Suspense | £540 | |
| TOTAL | £38,680 | £38,680 |
The bookkeeper investigated this difference and discovered that the Machinery account’s balance in the General Ledger was actually £8,540. To correct this error we will:
- Add £540 to the debit side of the Machinery account balance shown on the trial balance
- Add £540 to the credit side of the Suspense account balance shown on the trial balance (which will have the effect of clearing the Suspense account)
- Record a journal to be posted to the Suspense account in the General Ledger to clear the account (nb. no adjustment is required to the Machinery account balance in the General Ledger as this is already correct)
The journal would be as follows:
| Account | Debit | Credit |
| Suspense | £540 |
The Suspense account in the General Ledger would be as shown below (nb. the account has been closed down and no balance remains.
| Debit | Credit | ||
| Jnl: TB difference | £540 | Jnl: TB difference | £540 |
| £540 | £540 |
The updated trial balance is shown below.
| Account | Debit | Credit |
| Bank | £3,047 | |
| Capital | £4,720 | |
| Machinery | £8,540 | |
| Purchases | £14,520 | |
| Sales | £31,056 | |
| Wages expense | £3,970 | |
| Office expenses | £1,464 | |
| Sales ledger control | £7,139 | |
| Purchases ledger control | £1,960 | |
| VAT | £944 | |
| TOTAL | £38,680 | £38,680 |
