Suspense accounts

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February 19, 2021 at 5:25 pm #610979
andreaskraken
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Greetings once again

I just have a small confusion between suspense accounts and adjustments to errrors in profit

So I remember in the free lecture videos it was explained around the beginning of the class that you told both the topics are similar
Moreover you kept both the topics next to each other for a reason I suppose( the corrections of profit was first to be learned and next was the suspense lecture)

So I was going through some questions that involved correcting the errors of the profit and I noticed that the suspense errors were not recorded at all in correcting errors

I suppose there could be a reason behind explaining this pattern which I think you could help me out with

Thank you
February 19, 2021 at 5:30 pm #610981
John Moffat
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They are two separate topics. I only cover them both in the same chapter because they both involve errors.

If a question just asks you to correct the profit, then suspense accounts are not relevant (they are used in real life often to help sort things out, but they are not necessary when all we are doing is arriving at the correct profit).

Suspense accounts in the exam are only relevant if they are actually mentioned in the question.
February 19, 2021 at 6:00 pm #610984
andreaskraken
- Topics: 57
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Oh okay thank you I underastand why both the topics were placed in part A and part b now

Also In this question they gave us 4 options and asked us to identify the options that affect the suspense account….afterwards the question asked out to correct the profit

So in that scenario of that question they haven’t really asked the suspense account directly( im assuming they haven’t asked directly since they just asked to identify which of the ‘4 options’ affect the suspense account) so it isn’t relevant in the question of correctiong the profit right??
February 20, 2021 at 7:56 am #611047
John Moffat
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That is correct 🙂
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