PRC-1 · Chapter 3 · Question 84 of 100
If an extracted trial balance does not agree and draft financial statements must be prepared immediately, what action does the accountant take?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Open a temporary 'Suspense Account' to force the trial balance to balance.
Explanation
A Suspense Account is a temporary holding account used to artificially balance the trial balance when the debit and credit totals disagree, allowing draft accounts to be prepared while errors are investigated.
More Ledgers and Trial Balance MCQs
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- Q88If a liability account like 'Bank Loan' has a 'Balance b/d' of Rs. 100,000 on the credit side at the start of the year, this…
- Q89Under normal circumstances, the Owner's Capital account carries a credit balance. If it exhibits a debit balance, what does this signify?
- Q90What specifically differentiates an 'Adjusted Trial Balance' from an 'Unadjusted Trial Balance'?