Suspense Accounts Flashcards
1
Q
When do you use a suspense account?
A
when:
-the TB doesn’t balance
-one side of double entry is unclear
2
Q
What do you do with ‘stopped cheques’?
A
-if you banked it = reverse the entries
-if you stopped it = remove it from cash book
3
Q
What do you do with bounced cheques?
A
if a cheque is returned ‘refer to drawer’
-must reverse entries
4
Q
What do you do with out of date cheques?
A
-it becomes ‘stale’ after 6 months
-cancel the cheque in the cash book
5
Q
What are irrecoverable debts?
A
-one we know will not be paid
-have to be removed from our accounts
6
Q
Irrecoverable debts double entry
A
Dr Irrecoverable
Dr VAT
Cr receivables
7
Q
Journal for a bounced cheque
A
Dr RCLA
Cr bank
