A suspense account is a temporary account used to hold amounts when the correct accounting treatment or account head is not yet known. It allows the books to stay balanced while the issue is being investigated. Suspense balances should be cleared promptly because leaving them unresolved can distort financial reporting.
Systematic Allocation
Systematic allocation means spreading a cost over time or across units using a consistent and rational method. Depreciation and amortization are common examples of...
Sunk Cost
A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. Since it cannot be changed,...
Substantive Testing
Substantive testing is an audit procedure used to verify the accuracy and completeness of financial statement balances and transactions. It may involve checking invoices,...
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