Question

Mention the types of errors (any Two) which require the use of Suspense A/c.​

Answer 1

Answer:

error of commission

1.posting on the wrong side of account

2. error in balancing the account

Answer 2

ANSWER :

➲ Two types of errors which require the use of Suspense A/C are as follows :

• [1] When a subsidiary book is undercast or overcast : When a subsidiary book is undercast,that means totalled less or when a subsidiary book is overcast, that mean totalled in excess; then it affects the Trial Balance. Hence, such type of errors require the preparation and use of Suspense A/C.

• [2] When posting of a transaction is made on the wrong side of an account : When a transaction is posted in wrong side of an account, then it affects the result of the Trial Balance. For example, a particular transaction is to be posted on Debit side, but it has been posted on Credit side by mistake. It will affect the result of Trial Balance. Hence, this type of error requires the use of Suspense A/C.

MORE INFORMATION :

➲ Suspense Account :-

• Suspense Account is an account opened as a temporary mismatches measure only for the purpose of reconciling the errors of a Trial Balance. Suspense Account is used only to rectify those errors which affect the agreement of the Trial Balance. It is not used to rectify hose errors which do not affect the agreemnt of the Trial Balance.

↬ If the debit side of the Trial Balnace exceeds the credit side, the difference will be put on the credit side of the Suspense Account. Again, if the credit side of the Trial Balance exceeds the debit side,the difference will be debited to the Suspense Account.

After including the balance of Suspense Account in the Trial Balance, it will appear to have tallier to avoid the delay in the preparation of the Final Accounts.

➲ Utility of Suspense Account :-

• Suspense Account facilitates completion of the Trial Balance.

• Suspense Account facilitates passing of rectification entries.

• Suspense Account enables timely preparation of Final Accounts.