B2: 5.03 Single entry transactions

What in a single entry transaction?

A single entry transaction occurs when a bookkeeper or accountant records one side of a transaction but fails to record the corresponding debit or credit in the General Ledger.

Let’s say for example that a bookkeeper posts a bank payment to HMRC to the credit side of the Bank Control account but forgets to post the debit to the HMRC account. The Bank Control account balance will still be correct but the HMRC account balance will be incorrect and this will result in a difference between the total debits and credits of the trial balance.

When a single entry transaction is found, it can be corrected using a journal to record the missing debit or credit entry with the corresponding debit or credit being posted to the Suspense account.


A bookkeeper has prepared the following trial balance

The bookkeeper checked to ensure that his totals were correct and that no balances were omitted or duplicated from the General Ledger but no such errors were identified. He therefore opened a Suspense account so that the totals of the two columns would equal one another. The journal used is shown below together with the Suspense account.

The trial balance was then updated to include the newly opened Suspense account

The bookkeeper then investigated the matter and found that one of the payroll journals was posted incorrectly. He has recorded a debit of £3,643 in the Wages Expense account but had failed to record the corresponding credit to the Wages Control account.

The bookkeeper will therefore record the following journal in order to enter the missing credit and clear the Suspense account.

The above journals would then be entered in the General Ledger accounts and the balances on those accounts would be recalculated.

Finally, the trial balance can be updated with the corrected balance on the Wages Control account and, as no balance is left in the Suspense account, the Suspense account will be removed from the list of accounts in the trial balance.

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