JAMB Accounts Principles of Accounts 2011 Paper

Concept:A suspense account is a temporary account used to hold discrepancies in the trial balance until they are identified and corrected.Explanation:When the debit and credit totals of a trial balance do not agree, the difference is placed in a suspense account.This account acts as a temporary balancing figure.It allows the books to be balanced before the actual errors are located.Once the specific error is found, the suspense account is cleared by making the correct journal entry.Errors that cause the trial balance to disagree include one-sided entries, wrong amounts, or posting to the wrong side of an account.Errors that do not affect the trial balance, such as complete omission, do not require a suspense account.Therefore, the medium for correcting errors whose differences are shown in the trial balance is the suspense account.Answer:C. suspense account.