11-24-2004, 08:53 PM
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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>
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Treatment being an accountant
first of all try to locate the difference, if fails to do so, then make a fake party M/s ABC & Co. and put that in the list of creditors or Advances or debtors etc., and pray that auditor ignores or neglect it.
Treatment being an auditor
Suppose there is a difference to Rs.100,000/- only in 2 Bn Balance sheet. Imagine that the difference is a result of Rs.10,000,000 Dr. and Rs.10,000,000 Cr.
then issue the report containing following remarks.
Proper books of account have not been kept by the compnay as required by so and so, even the double entry system of accounting has not been followed by the company. In view of above we are unable to form any opinion.
(Keep in mind if the company contributes a handsome account to your revenue then take above risk otherwise 'Being Immaterial, Ignored' <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>)
SMR
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>
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
Treatment being an accountant
first of all try to locate the difference, if fails to do so, then make a fake party M/s ABC & Co. and put that in the list of creditors or Advances or debtors etc., and pray that auditor ignores or neglect it.
Treatment being an auditor
Suppose there is a difference to Rs.100,000/- only in 2 Bn Balance sheet. Imagine that the difference is a result of Rs.10,000,000 Dr. and Rs.10,000,000 Cr.
then issue the report containing following remarks.
Proper books of account have not been kept by the compnay as required by so and so, even the double entry system of accounting has not been followed by the company. In view of above we are unable to form any opinion.
(Keep in mind if the company contributes a handsome account to your revenue then take above risk otherwise 'Being Immaterial, Ignored' <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>)
SMR