Sokha Chan owns Bellwood Cycle Repairs in Cambodia, servicing bicycles for delivery firms and hotels that hold accounts with him. At 31 May 2026 the balance...

The two figures differ by $34 720 - $30 930 = $3 790, but that is not one error: it is the net effect of seven. The method is to sort the errors into those that affect the control account, which is inside the double entry system, and those that affect the list of individual balances, which is not. An error in a customer's personal account does not touch the control account, and an error in the day book total or in a control account posting does not touch the list.

(a) Correcting the sales ledger control account balance [10]

Four of the seven matters affect the control account.

1. Sales day book overcast by $900. The control account is posted from the day book total, so the debit for credit sales is $900 too high. Deduct $900. The individual accounts were posted from the entries, not the total, so the list is unaffected.
2. Discount allowed of $215 omitted from the control account. Discount allowed is a credit in the control account, so its omission leaves the balance $215 too high. Deduct $215.
3. Irrecoverable debt of $340 not entered in the control account. The write off should have been credited here as it was in the customer's account. Deduct $340.
4. Set off of $580 on the wrong side. It should have been credited, reducing the balance by $580; instead it was debited, raising it by $580. The account is out by twice the amount, so deduct $1 160.

Matters 2, 5 and 7 do not appear here, because none of them touches the control account.

(b) Reconciling the listed total with the corrected balance [8]

The other three matters are all errors inside the sales ledger, so they affect the list alone.

1. Sale of $460 written up as $640. That hotel's account is $180 too high. Deduct $180.
2. A balance of $1 260 missed from the list. The customer's account is correct; the listing is short. Add $1 260.
3. Returns of $95 entered twice. Returns are credited to the customer, so entering them twice makes that balance $95 too low. Add $95.

The corrected list of $32 105 agrees with the corrected control account balance of $32 105, so every part of the original $3 790 difference has been accounted for. That agreement is the proof that the investigation is complete, and $32 105 is the figure for trade receivables that goes into the statement of financial position.

(c) Suspense account or full investigation [7]

Sokha should trace every item, as has been done here. Writing the difference off to a suspense account is not an acceptable alternative for these errors.

• A suspense account balance belongs to no real account. It is a temporary holding place used while a search is going on, not a settlement. If $3 790 were left sitting there, the statement of financial position would carry a figure that represents no asset and no liability, and the accounts would not give a true and fair view. An auditor would not accept it, and a bank reading the statements would be misled about how much the business is really owed.
• Four of the errors change the reported profit or the receivables figure. The day book overcast alone overstates revenue by $900, and the omitted discount allowed of $215 and the unrecorded write off of $340 both overstate profit. Leaving them in a suspense account would mean reporting a profit that is $1 455 too high and receivables that are $3 790 too high.
• Three of them affect what individual customers are told they owe. The hotel in matter 2 would be chased for $180 more than it owes, which invites a dispute and damages a business relationship; the customer in matter 5 would never be chased at all, because the balance is not on the list; and the customer in matter 7 would be undercharged by $95. None of this is fixed by a suspense account, because the errors live in the personal accounts, which the suspense entry never touches.

The errors here were all traceable and were found, so the time was demonstrably well spent. The wider point is that a difference on a control account is a signal that something is wrong, and the value of the control account lies entirely in acting on that signal rather than burying it.