What is Suspense Account? Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

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FAQs on What is Suspense Account? Video Lecture - SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

1. What is a Suspense Account?
Ans. A Suspense Account is a temporary account used in accounting to record transactions when the proper account is not yet known or available. It acts as a placeholder until the correct account can be identified.
2. When is a Suspense Account created?
Ans. A Suspense Account is created when there is uncertainty about the appropriate account to record a transaction. This can happen when there is missing information, errors in documentation, or when the account has not been set up yet.
3. How is a Suspense Account resolved?
Ans. A Suspense Account is resolved by identifying the correct account for the transaction and transferring the amount from the Suspense Account to the appropriate account. This is done through further investigation, obtaining missing information, or correcting errors in documentation.
4. What are the consequences of leaving transactions in a Suspense Account for a long time?
Ans. Leaving transactions in a Suspense Account for a long time can lead to inaccurate financial statements and misrepresentation of the company's financial position. It is important to resolve Suspense Account items promptly to ensure accurate and reliable financial reporting.
5. Can a Suspense Account have a debit or credit balance?
Ans. Yes, a Suspense Account can have a debit or credit balance depending on the nature of the transactions recorded in it. If more transactions have been recorded as debits, the Suspense Account will have a debit balance, and vice versa. The balance will be resolved once the appropriate accounts are identified and the transactions are properly recorded.
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