Plz Help with This Question

[Jeremy007]

I'll be very grateful if anyone could help me with the following question cited from GTG. Even though the standard answer was provided, I'm still not sure it's right. If possilbe, give me the answer and the working please. Many Thanks.
4. A discount allowed of $1,600 was wrongly debited by $6,100 and a discount received of 5,400 was wrongly credited by $ 4,500 to the discount received account. What would you expect to see in the suspense account if the correct amounts were posted to the control account?

a) $3,600 debit
b) $3,600 credit
c) $5,400 debit
d) $5,400 credit

[Sonal]

d is the correct option.
Suspense account should be debited by $5,400

Solution:

1) In the first entry, discount allowed is more debited by $4,500 (instead of $1,600, account is debited by $6,100). To rectify this error, discount allowed should get credited by $4,500.

2) In the second entry, discount received is less credited by $900 (instead of $5,400, account is credited by $4,500). To rectify this error, Discount received should get credited by $900.

In both the cases, suspense account should be debited because:

1)
Dr Suspense Account $4,500
Cr Discount allowed $4,500

2)
Dr Suspense Account $900
Cr Discount received $900


Total amount debited to suspense account = $4,500 + $900 = $5,400

[Jeremy007]

Sonal,
Thank you so much for your prompty help. Your detailed workings have been extremely helpful. On the other hand, I think maybe, it'll be advisable to update the F3 errata sheet. I still have some doubts about a couple of the standard answers provided, even after checking with the errata sheet. Maybe, I'll post some here later. Many thanks again.

[Acid]

^Errata Sheets are always under review and as soon as errors are discovered they are reported in the sheets.


Regards