State whether the following statement is True or False:-
Suspense account is automatically closed after rectification of all errors.

True

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False

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Solution

The correct option is A True
The above statement is true.
When the errors are detected, the amount is transferred from Suspense Account to the respective account. Suspense Account stands automatically closed when the entire one sided errors are rectified. Thus, nil balance in Suspense Accounts is the conclusive proof of absence of one-sided errors in the books of accounts.

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Similar questions

State whether the following statements are True or False-

1) A trial balance can agree in spite of certain errors.
2) Errors committed due to lack of accounting knowledge are errors of omission.
3) Trial balance is prepared from the balance of ledger accounts.
4) Rectification entries are passed in cash book.
5) Single sided errors affect only one account.
6) Suspense account is automatically closed after rectification of all errors.
7) Errors affecting the agreement of trial balance are called on side errors.
8) There is no need to open a suspense account if the trial balance agrees.
9) All the errors can be rectified only through suspense account.
10) Compensating errors affect the agreement of trial balance.

Q. State whether the following statements are True or False.

On dissolution Cash or Bank Account is closed automatically.

Q. State whether the following statement is True or False:-
Single sided errors affect only one account.

Which of the following is incorrect with regards to suspense account in rectification of errors?

For rectification of which of the following errors, suspense account is used?

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State whether the following statement is True or False:-Suspense account is automatically closed after rectification of all errors.

State whether the following statement is True or False:-
Suspense account is automatically closed after rectification of all errors.