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Rectification of Errors in the next Accounting Period

Accountancy

Relevant Account, Suspense Account and Profit & loss Adjustment Accounts are used to Rectify the Errors. In what scenario (nature of transaction) we should choose profit & loss Adjustment Account or Suspense Account.

Siv Ram

CA Inter

★ 775

18-Sep-23 21:22

Answers (2)

P&l adjustment account can be used when there is any error disclosed after the b/s date. Suspense account can be used when after adjustment of errors, some of the errors arise then that type of errors tfr to Suspense account