The Cash Book on a Trial Balance

[Jeremy007]

Could anyone kindly help me with the following question (extracted from F3 Question bank)?

"A cash sale of $ 700 made to a customer was not recorded in the cash book."

Does the above error affect the suspense account or not? Why or Why not?

Many thanks

[ABBAS ALI]

Its possible sale were made on credit that why not recorded in cash book.

[Tammi]

Hi, Jeremy007,

"A cash sale of $ 700 made to a customer was not recorded in the cash book."
This means that the debit entry was not made in the cash book, there is just a credit entry in sales, so of course this error will affect suspense account while the trial balance does not balance, there is 700 more on the credit side, so you should open a suspense account and make a debit entry there. But after finding the mistake the double entry will be:
debit - cash account
credit - suspense account

Hope this will help
Regards

[Jeremy007]

Hi, Jeremy007,

"A cash sale of $ 700 made to a customer was not recorded in the cash book."
This means that the debit entry was not made in the cash book, there is just a credit entry in sales, so of course this error will affect suspense account while the trial balance does not balance, there is 700 more on the credit side, so you should open a suspense account and make a debit entry there. But after finding the mistake the double entry will be:
debit - cash account
credit - suspense account

Hope this will help
Regards

Tammi, thanks a lot for your clear explanations. I share your view but that is differnt from the answer provided by "Getthroughguide's question bank". In fact, according to the book (E9, 41), the error mentioned above didn't affect the trial balance. I found it very difficult to understand why not. But when I looked up the relevant errata sheet provided, I couldn't find a correction to this "seemingly very obvious mistake". I wonder if both of us are wrong or GTG is a bit too slow in correcting their errors. BTW, if any other senior member of this forum can further confirm our view, that'll be even more convincing to me.
Cheers
Jeremy

[bluewednesday]

Presuming that the credit entry was made to sales then it would affect the trial balance and therefore the suspense account. The trial balance will have no debit entry (which should have been made into the cash book) so suspense will have to be debited until the error is found. I would interpret it as Tammi has and completely agree with her answer.

However they could be saying that no entry has been made in the accounts at all which would then mean that the trial balance would balance and the suspense account isn't involved. It's not very clear which is the case.

If you interpret it as Tammi (and I) did then the answer is wrong. However the question could just be not very clear.

[Jeremy007]

Presuming that the credit entry was made to sales then it would affect the trial balance and therefore the suspense account. The trial balance will have no debit entry (which should have been made into the cash book) so suspense will have to be debited until the error is found. I would interpret it as Tammi has and completely agree with her answer.

However they could be saying that no entry has been made in the accounts at all which would then mean that the trial balance would balance and the suspense account isn't involved. It's not very clear which is the case.

If you interpret it as Tammi (and I) did then the answer is wrong. However the question could just be not very clear.

Bluewednesday, many thanks for your prompt response, which has categorically clarified my confusions. Both of you have been really kind to offer us newbies great advice.