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Trial Balance and Rectification of Errors — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountTrial Balance and Rectification of Errors6 Marks
Question
What is a suspense account? When is it opened?
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Answer

Suspense Account: Sometimes, in spite of best efforts of an accountant, all the errors are not located and the Trial Balance does not tally. In such a situation, to avoid the delay in the preparation of final accounts, the difference in the Trial Balance is placed to a newly opened account known as “Suspense Account”' and the Trial Balance tallies. If the debit side of the Trial Balance exceeds the credit side, the difference will be put on the credit side of the suspense account and if the credit side of the Trial Balance exceeds the debit side, suspense account will be debited. After including the balance of suspense account in the Trial Balance, it will appear to be tallied.

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