11-23-2004, 11:45 PM
The suspense of suspense account is killing me. We all know that there might be situations when two sides of a Trial Balance are not in agreement with each other which is due to the errors committed by the accountant in the subsidiary books or ledgers (which may pertain of posting of wrong amounts or miscast etc.) and a mysterious "Suspense Account" is opened to eradicate the difference. Whenever the errors are rectified later on, the suspense account is eliminated and everything becomes OK.
But the question is, at the end of financial period, if the error is not detected and therefore, not rectified, what would be the treatment of that newly created Suspense A/C? The contents of Trial Balance have a single effect (single entry) Therefore, it sould eiter go to the Income Statement/Trading Profit & Loss A/C or the Balance Sheet. Where does it lie? And more importantly, is it further continued or not? If not, why? <img src=icon_smile_question.gif border=0 align=middle>
Life Life in the Fast Lane!
But the question is, at the end of financial period, if the error is not detected and therefore, not rectified, what would be the treatment of that newly created Suspense A/C? The contents of Trial Balance have a single effect (single entry) Therefore, it sould eiter go to the Income Statement/Trading Profit & Loss A/C or the Balance Sheet. Where does it lie? And more importantly, is it further continued or not? If not, why? <img src=icon_smile_question.gif border=0 align=middle>
Life Life in the Fast Lane!
