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Trial balance suspense account concept
Accountancy
When tb doesn’t tally ,we move it to suspense account. So do we proceed with p&l and balance sheet preparation or we need to first identify why there’s a difference in tb and pass rectification entry and then proceed with p&l and bs preparation Video Details ------------- Accounting - CA Foundation (New) Trial Balance #5. Suspense A/C
Answers (2)
In real life when we prepare accounts on ERP/Computers, the trial balance always tally. Suspense account is largely used for unidentified transactions. If the Trial Balance does not match (in case of manual accounting), you put the difference in a Suspense Account so the accounts can move ahead. You can still prepare the Profit & Loss Account and Balance Sheet even if there is a Suspense Account. This ensure that audits can start without any delay. As we find mistakes and error we rectify them before finalisation of accounts. Auditors check carefully and make sure the Suspense Account becomes zero before final accounts are accepted. Some items may not be identified.
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