- This topic has 6 replies, 3 voices, and was last updated 3 months ago by Ken Garrett.
- September 6, 2017 at 10:44 pm #406242dilawarkhandk
Why a suspense account is SOFP account???
And How we present it in the final accounts if all errors does not identified and corrected??September 6, 2017 at 11:10 pm #406244dilawarkhandk
Q#3 in text book written that (…in the books of prime entry the analysis columns of discount allowed, discount received, and sales tax are memorandum columns and they are not part of double entry) how this is right.???
We know that these all are part of double entry then how they are memorandum columns?September 7, 2017 at 5:49 pm #406469Ken GarrettKeymaster
The books of prime entry for sales and purchases is the sales day book and purchases day book and neither of these is part of the double entry system – they are just lists from which posting are made.
I’m sorry, but I don’t really understand what your text book is trying to say.September 7, 2017 at 5:57 pm #406479Ken GarrettKeymaster
It is an SOFP amount because that way the error is not forgotten about and it will be carried forward to the following period. If it went to P&L it would simply disappear in the net profit.
No proper accountant would be willing to show a suspense amount in the final set of accounts. It is evidence that the accounts are wrong and the accountant is incompetent. Small amounts might be written off to P&L but most auditors would be reluctant yo let that pass.September 7, 2017 at 8:38 pm #406587dilawarkhandk
ThanksAugust 20, 2020 at 10:15 am #581269masaeel
how to learn suspense account completely from basic, i have many problem with this.????August 20, 2020 at 1:36 pm #581283Ken GarrettKeymaster
Our FA2 notes, Chapter 9 covers suspense accounts in some detail.
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