suspense account

[mhd012]

A company made sales of $2,950 inclusive of sales tax at 18%.
The company debited the Receivables account $2,950, credited sales $2,950 and credited the
Sales Tax account $531.
What corrections are required?
A! Dr Sales! $450;! Dr Sales tax $81;! Cr Suspense account $531
B! Dr Sales! $531;! Cr Suspense account $531

what will be the ans here. Please explain. If you able, please teach me the trick to solve these kinds of problem successfully.

 

[bklynboy]

Answer is A - though the the example does not balance (1 debit of 2,950 and 2 credits totalling 3,481)??

Anyway,
The sale is made up of two pieces the revenue to the company (2,500) and sales tax at 18% (450). So the correction required is to reduce sales to 2,500 by a debit of 450, reduce sales tax to 450 with a debit of 81 and offset to suspense - presumably to balance the entry.

 

[mhd012]

Answer is A - though the the example does not balance (1 debit of 2,950 and 2 credits totalling 3,481)??

Anyway,
The sale is made up of two pieces the revenue to the company (2,500) and sales tax at 18% (450). So the correction required is to reduce sales to 2,500 by a debit of 450, reduce sales tax to 450 with a debit of 81 and offset to suspense - presumably to balance the entry.

Thank you much