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Suspense Accounts

RAKESH R (Student) (28 Points)

23 September 2021

How do treat the following while preparing Balance sheet

Adjustment

1.Suspense A/c includes money advance to sales manager , who was sent to a business trip, he spent Rs.9000/- for miscellaneous expenses and balance is yet to be refund by him. (Suspense A/c debit Balance Rs.35,000/-)

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3 Replies

prasad Nilugal (3924 Points)
Replied 23 September 2021

You have to clear all suspense account before preparing Balance sheet . you can not finalized the accounts unless you clear suspense account .
1) Ask manager for Bills, cash memo, Invoices and any other documentary evidence to clear Rs 9000/.
Similarly you have to clear balance 26000/- lying in suspense account . After you getting all documentary evidence ( expense) for 35000/- . you pass following entry .

Expense A/c Dr 35000/-
To Suspense A/c Cr 35000/-
( clearance of suspense account )

you can clear suspense account in above manner , however you need documentary evidence to prepare Expense voucher .

Seema Gupta (auditor) (283 Points)
Replied 25 September 2021

You can get supporting documents for the total expense amount from the sales manager and the balance amount can be taken back otherwise the balance amount can be debited to Manager's Imprest Account.