07-18-2010, 10:13 AM
Brother, I think its a type of trick question.
As we know that if we receive a check of say 5000 from Mr.Ahmed (Say), but in our records there is no one by the name of Ahmed (neither in Receivables nor in payables) what we will do is to Debit the Cash account and for the time being Credit SUSPENSE account.
I think the same would apply here, If the question does not tell, what the invoice is all about, what you have to do is to Debit the cash account and credit the suspense account. Make a note to the examiner at the end of the question as follows
NOTE Since the purpose of the invoice is unknown, a suspense account has been opened and a correcting entry shall be passed as soon as the purpose is known.
As we know that if we receive a check of say 5000 from Mr.Ahmed (Say), but in our records there is no one by the name of Ahmed (neither in Receivables nor in payables) what we will do is to Debit the Cash account and for the time being Credit SUSPENSE account.
I think the same would apply here, If the question does not tell, what the invoice is all about, what you have to do is to Debit the cash account and credit the suspense account. Make a note to the examiner at the end of the question as follows
NOTE Since the purpose of the invoice is unknown, a suspense account has been opened and a correcting entry shall be passed as soon as the purpose is known.
