The 'Suspense Account' is opened when: MCQ with Answer and Explanation

Question
The 'Suspense Account' is opened when:
A. A fraud is detected
B. Trial balance does not agree
C. An asset is sold
D. Final accounts are prepared
Answer: Option B
Solution (By JKSSB Mock Tests)
It holds the difference in trial balance until errors are located.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
A 'Rectifying Entry' is passed to:
A. Close the books
B. Correct errors in accounts
C. Adjust depreciation
D. Record opening entries
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Correct Answer: Option B

Explanation:
Rectifying entries correct errors found after posting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The process of recording transactions in the journal is called:
A. Balancing
B. Footing
C. Posting
D. Journalizing
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Correct Answer: Option D

Explanation:
Journalizing is the process of recording business transactions chronologically in the journal, which is the book of original entry.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Which of the following is NOT a principle of cash-based accounting?
A. No record of credit transactions
B. Revenue is recognized when cash is received
C. Revenue is recognized when earned
D. Expenses are recognized when cash is paid
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Correct Answer: Option C

Explanation:
Recognizing revenue when earned is a principle of accrual accounting. Cash-based accounting only recognizes revenue when cash is actually received.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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