Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Suspens account

Sayed Nabil (356 Points)

24 August 2021

is suspend account closing balance can transfer to capital account

Reply
Follow
Share

5 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 24 August 2021

a SUSPENSE ACCOUNT CAN BE ANYTHING IKE ASSET, LIABILITY, EXPENSES AND INCOME. ONCE YOU TRANSFER A TRANSACTION, IT SHOULD BE CARRIED FORWARD TO THE NEXT PERIOD. IF CAPITAL ACCOUNT HAS A SUSPENSE ENTRY, THEN YOU CAN TRANSFER IT TO SUSPENSE ACCOUNT. EXAMPLE,

SHARE ISSUED TO RAM WORTH 500 AND UNDER SUSPENSE ACCOUNT NOT KNOWING WHO PAIDUP FOR THE SHARES,

BANK A/C 500

TO SUSPENSE A/C 500

WHEN YOU SORT THIS PROBLEM AND FINDS THAT RAM GAVE THAT MONEY

SUSPENSE A/C 500

TO CAPITAL A/C 500

Upgrade to CAclubindia Pro. Subscribe Now!

Sayed Nabil (356 Points)
Replied 24 August 2021

Mere case main suspend account ka closing balance credit side hai

Chain to Help (35 Points)
Replied 24 August 2021

Sayed first you will have to try to find out why that is open I mean which kind of expense is it.

like we forgot to pay amount to some one or we get amount from some one so we will have to find to clear that amount or Suspense as its a correct way rest at the time of closing or finalising of account then we decide where we can do adjustment at last

Sayed Nabil (356 Points)
Replied 24 August 2021

Ok but my question is can we adjust with capital account at the of account finalization

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 24 August 2021

Then it means it is either a purchase return, gain or capital received. You have to find out what it is and rename suspense account to the relevant account. My second entry doesn’t mean you can debit the Suspense to statement, it is just a representation that debit takes out Suspense account and replaces it with Ram capital a/c. I heard there are some transactions which were never sorted out and the balance was in Suspense account for a long time because, they don’t known how a transaction occurred.