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RECTIFICATION OF ERRORS.
Accountancy
Respected Sir. In the rectification of errors , when we do the rectification of previous year's transactions in the current year. It may have SUSPENSE A/C in the previous year. But when we do the rectification of those previous year's transactions ( those have impact on last year suspense a/c ) in the current year. then Suspense a/c will not have any balance in the CURRENT year. But in the last video lecture, sir says that SUSPNESE A/C balance should be transferred to CAPITAL a/c, but If I am not wrong there will not have any balance in the suspense a/c in the current year to transfer . Then why do you say SUSPENSE a/c balance should be transferred to Owners capital ? Please goodie me sir.
Answers (4)
Naresh Sundar
Because, when you do rectification in current year, for one side errors you must use suspense a/c to rectify which creates some balance in suspense a/c. Hence after finishing all rectification, you must transfer it to capital a/c.
Thanks for your reply, Please clarify the term one side errors. Suspense a/c comes to picture only when , last year you could not find those mistake and you want to make the last year trail balance tally. Then second year you found out the mistakes of last year and you rectify those mistake by using last year's suspense a/c. , So please note that there will be an opening balance (i.e last years closing balance ) in the suspense a/c of current year and when we rectify those mistakes , suspense a/c become zero. Then please tell me what closing balance are you talking about. ?
https://www.youtube.com/live/Py6OhpDpR2g?feature=share Watch these two videos.