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Question
Write a note on the suspense account.
Short Note
Solution
- When the trial balance does not tally, the amount of difference is placed to the debit (when the total of the credit column is higher than the debit column) or credit (when the total of the debit column is higher than the credit column) to a temporary account known as ‘suspense account.
- Suspense account will remain in the books until the location and rectification of errors.
- After rectifying the errors and posting the rectification entries to the respective ledger accounts, the suspense account appearing in the ledger is to be balanced.
- If all the errors are located and rectified, the suspense account gets closed.
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Suspense Account
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RELATED QUESTIONS
While preparing the trial balance, the accountant finds that the total of the credit column is short by ₹ 200. This difference will be __________.
The difference of totals of both debit and credit side of trial balance is transferred to ____________.
From the following balances, prepare trial balance of Baskar as on 31st March, 2017. Transfer the difference, if any, to the suspense account.
| Name of the account | ₹ | Name of the account | ₹ |
| Opening stock | 40,000 | Debtors | 25,000 |
| Capital | 90,000 | Carriage inwards | 16,500 |
| Sales | 1,77,200 | Bills receivable | 20,000 |
| Salaries | 12,000 | Commission received | 5,550 |
| Bills payable | 9,450 | Cash at bank | 17,000 |
| Telephone charges | 2,350 | Furniture | 19,000 |
| Creditors | 16,000 | Plant and Machinery | 55,800 |
| Purchases | 85,000 | Repairs | 550 |
