Q.The Trial Balance of Kavya Traders as on 31 March 2026 showed a difference of ₹450 (credit side higher), which was placed to the debit of a Suspense Account. On subsequent investigation, the following errors were found. Journalise the rectification entries, show the Suspense Account, and verify that these three errors together fully explain the ₹450 difference:

The difference in the trial balance totals is transferred to a Suspense account — option (c).

Why a Suspense account?

• A trial balance should have equal debit and credit totals. If it does not, some error exists.
• To avoid delaying the final accounts, the difference is put into a temporary account called the Suspense account so that the trial balance tallies for the time being.
• When the errors are later found, they are rectified through the Suspense account, which is then closed automatically once the difference is fully explained.

Why not the others? …

A Suspense account is used only for one-sided errors. Undercasting the Purchase Returns book by ₹1,000 affects just the Purchase Returns account, so it is rectified through the Suspense account — the correct answer is option (b).

Rectification uses a Suspense account only when an error affects one side (one account) alone, leaving the Trial Balance out of agreement. Two-sided errors affect two accounts and self-balance, so no Suspense account is needed.

Checking each option:

• (a) Sales Returns recorded as ₹90 instead of ₹900 — a wrong amount posted through the subsidiary book affects both the Sales Returns account and the customer's account → two-sided, no suspense. …

A trial balance difference is transferred to a suspense account until the errors causing it are found and corrected.

When the debit and credit totals of a trial balance do not tally, it indicates the presence of one or more errors. To avoid delay in preparing the final accounts, the difference is transferred to a Suspense Account:

• If the debit side is short, the difference is put on the debit side of the suspense account.
• If the credit side is short, it is put on the credit side. …

The difference between the two totals of a trial balance is transferred to a suspense account, so the answer is (a).

If the debit total and credit total of a trial balance do not match, it signals one or more errors. Rather than delay the accounts, the difference is put into a temporary account called the suspense account — a debit difference is credited to suspense and vice versa — so that the trial balance can be made to agree for the time being.

…

The Suspense account is a temporary account.

When a trial balance does not tally and the difference cannot be immediately located, the difference is placed in a Suspense Account so that the trial balance can be closed and further work (like preparing draft final accounts) can proceed. Once the actual error(s) causing the difference are found and rectified, the Suspense Account is cleared t …