Chapter 15 Suspense accounts

Question 1

What are suspense accounts?

Answer 1

An account temporarily opened to record a difference between the debit and credit balances.

Question 2

What are the checks to be carried out before opening a suspense account?

Answer 2

• If the difference is divisible by 02, look for a balance of half the difference.
• If the difference is divisible by 09, look for a balance where digits may have been reversed.

Question 3

What are the types of errors which will require a suspense account to be opened?

Answer 3

• when only half of the transaction has been posted
• when both entries have been made on the same side of two separate accounts.
• When the entries have been made on the correct sides, but two different amounts have been recorded.

Question 4

What are the questions to ask when correcting errors?

Answer 4

How has the transaction been recorded?
How should have it been recorded?
What adjustments are required to correct errors?

Question 5

What to remember when correcting errors?

Answer 5

An item on the wrong side of the account must be doubled to correct the error.