1. Is there any difference between insolvent and bankrupt in law?
2. What is suspense account? why and when it is used in accounting
and what is its tratment?
khan
1 In my view both words mean "Deewaliya"
2 suspense account is created when your trial balance does not balance due to errors in ur double entry procedures like
passing general entry
posting to ledgers
carry forward of balances erroneoulsy etc.
and when u rectify all the errors the balance of suspense account will be NIL.
There is a will. There is a way.
www.sarfraz.cjb.net
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I think a natural person goes bankrupt, whereas a corporate person (companies etc.) go insolvent ...
"Allah does not change the state of people unless they change what is within themselves" Quran 1311
hello sarfaraz and pracs,
thank you so much for reply......sarfaraz i think you are right but if we fail to find the error and accounting year ends than what will be the treatment of suspense account. It will go to the balance sheet or income statement? What is the nature of suspense account temporary or permanent?
thank you so much pracs. personaly i agree with you and i think it is the perfect answer but please explain whether this difference exist in law or you just personaly think............
thank you again.
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salaam all,
the word 'bankruptcy' is a British terminology, n is extensively used in their books. the word 'insolvency' is the term used more frequently in many other countries, including pakistan. both words r the same ie mean the same.
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FARHAN
live, n let live ...
hi farhan,
thanks for the reply
take care
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it's not about power,it's
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