Question
What do you mean by Suspense Account? When is it opened?
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Answer
Suspense Account: Suspense Account is the account to which the amount being the difference in trial balance is temporarily placed. If the total of debit side is short, Suspense Account will show debit balance. And if, the total of credit side is short, Suspense Account will show credit balance. The difference is placed in the Suspense Account so that final accounts are prepared without delay. As a result of this, Trial Balance will appear to agree.. However, the errors still remain in the Trial Balance which are identified and rectified.
Suspense Account is used for rectifying all One-Sided Errors: It is opened Due to errors any error in journal entries especially one-sided errors, There may be cases when Trial balance does not match i.e when the total of the debit column does not match that of the credit column, then the difference of the Trial Balance is transferred to a temporary account in order to avoid delay in preparation of the financial statements. This temporary account is termed as Suspense Account and it is prepared only in case of one-sided errors in the books of accounts.
Suspense Account is used for rectifying all One-Sided Errors: It is opened Due to errors any error in journal entries especially one-sided errors, There may be cases when Trial balance does not match i.e when the total of the debit column does not match that of the credit column, then the difference of the Trial Balance is transferred to a temporary account in order to avoid delay in preparation of the financial statements. This temporary account is termed as Suspense Account and it is prepared only in case of one-sided errors in the books of accounts.
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