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Suspense Accounts

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RAKESH R

Student

27 Points Posted on 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/-)

Replies (3)

Quick Summary

This discussion explains how to treat suspense accounts when preparing a balance sheet. It focuses on clearing a suspense account that includes an advance to a sales manager for a business trip. The advice is to obtain documentary evidence for the expenses incurred and then clear the suspense account by debiting the expense account. If documentary evidence cannot be provided for the full amount, the remaining balance can be debited to the manager's imprest account or taken back.

prasad Nilugal

2353 Points Posted on 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

256 Points Posted on 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.