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What Does Suspense Account Mean?
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Answer / chandu
Suspense account means,at the time of preparing trail
balance the debit and credit balances are not equal,we are
not able to equal the two things because of some accounting
errors,at that time we create a suspense account and put the
balance in that.
In another terms in business some sort of expenses and
revenues don't have specific ledger, at the time those
expenses and revenues show in the separate account,its
called as suspense account.
| Is This Answer Correct ? | 46 Yes | 5 No |
Suspense account is usually maintained when there occurs and
diffrence in the debit and credited side of trail balance.
So Suspense account is maintained to adjust the difference
in trial balance. It may occur due to the following:
error of ommission
error of commission
error of principle
The main purpose of this account is to show the ture and
fair picture of balancesheet.
| Is This Answer Correct ? | 13 Yes | 1 No |
Answer / lakshmi narayana
the purpose of preparing trail balance to know the
arithemetical accuracy of an organisation at a given period
by posting the ledger balances,side by side. Due to some
errors made by the clerical staff dr N cr balances of trail
balance would not tally. To overcome this one temperary a/c
is prepared and the difference bal should be delivered to
that a/c.It enables the org to move forward to prepare other
a/c s like trading and p&l a/s and balance sheet to know the
financial position of the co.After the errors have been
rectified then the bal in susprense should be nullified.
| Is This Answer Correct ? | 5 Yes | 2 No |
Answer / rajani
when the debit and credit balances do not match in the
trial balance the difference is transfereed to the suspense
account, the difference can arise to the errors in the book
keeping.
later rectification of errors is done to nulify the
difference
| Is This Answer Correct ? | 5 Yes | 2 No |
Suspence A/c is a temperory account which is created to
prevent wrong entry or posting the same in ledger. after
geting knowledge about the expense or income the same is
posted into right head it is used to prevent from error of
ommisstion, commission, pricipals.
| Is This Answer Correct ? | 2 Yes | 1 No |
Answer / divya ostwal
An account that is used to store short-term funds or
securities until a permanent decision is made about their
allocation..
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / vinod
Suspense Account is created to park the un-identified
entries. Example. The invoice number is quoted by customer
while making the payment. It will parked in the suspense
account untill we investigate and identify the invoice
number of the particular transaction.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / raghavendra
when trial balance does not tally inspite of the best
effort so presantion of fianla account can not posspond
for a long period so supense account is placed when debt
side of trial balance is short supense account is placed on
debt side and when credit side is short supense account is
placed credit side
| Is This Answer Correct ? | 1 Yes | 1 No |
Why you want to chage the current job in 8 months time?
WCT ,TDS,Service tax ,costmor accounting
Telephone expenses 4000 Show entry in expenses not payment entry
2. You are required to prepare a Profit & Loss Account for the year ending 31st December, 2007 and the Balance Sheet on that date. The Trial Balance of XYZ Ltd. for the year ended 31st December 2007 is as follows:- Trial Balance of XYZ Ltd. as on 31st Dec. 2007 Debit Balances Rs. Credit Balances Rs. Materials used 3,50,000 Sales(including 2% Sales tax) 9,18,000 Cost of Labour 1,50,000 Sale of Scrap 100 Stock, finished and work in process on 31st December, 2006 50,000 Rent received 2,000 Wages : Factory Staff 15,000 Discounts 2,750 Directors Remuneration 50,000 Recovered against fire claim re : Stock 5,000 Salaries : Clerical Staff 75,000 Capital : Equity 25,000 Insurances : Workmen’s Compensation 1,500 Preference- 9% 8,000 General, fire etc. 2,000 Creditors 1,56,000 Directors’ Life Insurance 1,500 Provision for Taxation 1,05,000 Maintenance : Buildings 1,000 Profit & Loss Account 13,750 Plant and Machinery 12,500 Rent and Rates of premises and hire of plant 20,000 Heat, Light and Power 15,000 Experimental and Laboratory Expenses 10,000 Canteen Expenses 5,000 Staff Welfare expenses 2,500 Motor Expenses 12,500 Professional Charges 2,800 Postage and Telephone 3,500 Books, Printing and Stationery 11,000 Sundry expenses 10,000 Carriage and Packing on Sales 3,300 Discounts 5,000 Debtors 1,78,000 Freehold Property 50,000 Plant and Machinery 12,500 Fixtures and Fittings – Offices 3,500 Office machinery and Equipment 3,000 Motor Car and Van 6,500 Stock of materials on 31st Dec. 2007 1,20,000 Bank 38,000 Sales Tax Paid 15,000 12,35,600 12,35,600 Depreciation is to be provided at the following rates: Plant and Machinery 10% Fixture and Fittings 05% Office Machinery, etc. 10% Motor Vans and Cars 25% The stock of finished goods and work in progress as on 31st December, 2007 was Rs. 35,000. Provide for preference dividend and ordinary dividend at 10%. The total taxation liability is estimated at Rs.1,50,000 of which Rs. 75,000 relates to the current year. Debtors include Rs. 10,000 deposited as security against government contracts. The Works Manager is paid partly by salary and partly by a commission; he is entitled to a commission of 5% on the amount by which the surplus in the factory cost exceeds 20% of the sales for the period. Charge the commission if any in the Profit and Loss Account.
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