Correcting Understatement in Sales via Suspense Account

Steps:

• Identify error: Sales account credited $500 instead of$2500, understating it by $2000 (adjusted to$250 in options for correction amount).
• Note impact: Trial balance imbalance led to suspense debit of $250 to balance.
• Correct sales: Increase sales by crediting $250 to reflect full amount.
• Clear suspense: Debit suspense $250 to reverse temporary entry and balance books.

Why B is correct:

• Debiting suspense and crediting sales increases the credit side of sales (per double-entry rule), correcting the understatement and closing suspense.

Why the others are wrong:

• A: Debits sales (worsens understatement) and credits suspense (fails to clear it properly).
• C: Debits and credits same account, resulting in zero net effect.
• D: Identical to B, but listed separately—likely a duplication error.

Final answer: B