Meaning of Suspense Account - SS1 Accounting Past Questions and Answers - page 1
What is a suspense account?
A permanent account used for recording transactions
A temporary account used for recording transactions that cannot be immediately identified or allocated to a specific account
A type of account used for recording suspenseful events
When is a suspense account used?
To record all transactions in a company
To record transactions that can be immediately identified
To record transactions that cannot be immediately identified or allocated to a specific account
How long should a transaction remain in a suspense account?
Indefinitely
Until the end of the financial year
As soon as possible to ensure accurate financial reporting
Why should a suspense account be cleared as soon as possible?
To increase the suspenseful nature of the account
To ensure accurate financial reporting
To avoid paying taxes on the balance
What is the purpose of a suspense account?
The purpose of a suspense account is to temporarily hold transactions that cannot be immediately identified or allocated to a specific account until the appropriate account can be determined.
When should a suspense account be cleared?
A suspense account should be cleared as soon as possible to ensure accurate financial reporting.