29 January 2018
There are 2 kinds of suspense accounts. One which we as students traditionally used to study that if there is a mismatch in the totalling then we can add a suspense account for the differential account. This kind of suspense account is NEVER used by any prudent person. It may make your books unreliable and susceptible to investigations and scrutinies.
The other suspense account which is practically used is in respect of those accounts which may be receivable/payable. It is not, as such, a contingent asset or a contingent liability. You can find the instances of this is Service tax and Excise regime. Many amendments were brought in Service tax regime due to this.
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