Let us make in-depth study of the meaning, utility and preparation of suspense account. Meaning of Suspense Account: Suspense Account is a temporary ledger account, opened for putting the difference on shorter side of the trial balance. Sometimes, it is not possible to locate someone sided errors in-spite of taking all efforts for their detection. As trial balance is the [...]
Read this article to learn about the seven steps for detecting errors in trial balance. Step 1: Check the total of debit and credit columns of the trial balance. To arrive at the exact total, one should go through opposite directions viz., from top to bottom and bottom to top or vice-versa. Step 2: Re-check the correctness of balances of [...]
Here we detail about the three methods for preparing trial balance of an account, i.e.,(I) Balance Method, (II) Total Method, and (III)Balance and Total Method. (I) Balance Method: Under this method, debits and credits balances are to be extracted from all ledger accounts, including cash book and shown in this schedule. The following steps shall be taken in preparation of [...]